Microtek renews focus on IT products

Aims to double its turnover in 2004-05

After lying low for quite sometime, not only is this home
grown IT manufacturer planning a come back, it is also scripting a plan that
would help the company double its IT turnover in a year’s time. Rightly then,
for Microtek International Pvt Ltd the mantra for next fiscal year is ‘Double
IT’.

To begin with, the company has decided to restructure its
operations and club them under two divisions–power and IT. While its highly
success-ful power management prod-ucts–UPS, stabilizers and in-verters–have
been put under the powered division, the motherboards, monitors, spea-kers and
cabinets have been clubbed under the IT division. The company is also
consi-dering getting into the consu-mer electronics OEM market for the supply of
PCBs and SMT-based boards for products like washing machines. The comp-any’s
power division, however, would manage these products.

While Anil Gupta, Director, Microtek International, will look
after the IT division for Delhi and UP, VK Kapur, also a Director, will take
care of South and West. Besides, Vivek Jain, Director (Marketing), will be
handling the entire inverter market.

Talking about the hiberna-tion phase and the follow-up action
plan, Kapur said, "The downturn had led us to an uncertain market scenario
and we were not sure about the future of manufacturing in IT. The market was
operating on a two percent margin and grey channel further worsened the business
proposition for us." However, with the govern-ment’s mini budget offering
more sops and the WTO duty regime 2005 round the corner, Microtek has been able
to put pieces of its business in the right place.

According to Kapur, the com-pany had adopted the prover-bial
"wait and watch" policy and hence was deliberately maintaining a low
profile. "The same uncertainty forced us to look for alternatives and power
management solution was one such area. First came the inver-ters followed by
stabilizers," he added. With the period of con-solidation, re-thinking and
re- strategizing almost over, the company is not only looking ah-ead to woo the
market afresh, it also has plans to paint the walls red with media blitzkrieg.

Kapur also informed that Microtek is setting up a
mother-board manufacturing facility in Parwanoo, Himachal Pradesh, which will be
operational by June this year. It already has in place assembly lines for CRT
monitors there but is also sett-ing up a plant for manufactur-ing of large
screen CRT moni-tors and LCD monitors.

From being a manufacturing company, Microtek is also gearing
up to move into trading as well. Kapur stated that in some time the ratio
between manufacturing and trading will be 50:50. "Now we feel a comfortable
zone has come with the new duty regime."

Having already phased out keyboard and mice, it is con-centrating
upon its mother-boards and monitors. "Both of these products will be based
on SMT and we plan to enter the high-end monitor market too," informed
Kapur.

With already having estab-lished after sales service net-work
all over India and to inc-rease its penetration in far off places, it has
divided the net-work into four zones, with heads to focus in their respec-tive
zones. Also, to garner maxi-mum benefit of the forthcom-ing zero duty regime,
Microtek plans to have two trading hubs in each of the ports. This would enable
the company to ship products directly to the major cities without attracting
additional four percent Central Sales Tax (CST).

"This would be a big saving for us. Couple this with the
mar-gins that we as bulk importers can bargain and we have a good reason to move
into trading," Kapur explained. According to him, this will also help
Microtek reduce the multiple transit cost of the goods besides reducing the time
to market.

Microtek has also scripted its plans to woo the channel com-munity
through its various schemes and is already cond-ucting various roadshows aro-und
the country. Plans for mar-keting blitz through advertise-ments, with more focus
on the regional print media and electronics to reach to the masses in small
towns and upcoming metros are also in its final stage. The company also plans to
increase visibility through participation in vari-ous exhibitions.

Shubhendu Parth & Karma Negi

New Delhi