Electrolux Kelvinator MD and CEO Rajeev Karwal in Calcutta on Thursday. Picture by Kishor Roy Chowdhury

Calcutta, Sept. 11: Electrolux Kelvinator Limited (EKL) will cut jobs at its two refrigerator manufacturing units in Shahjanpur in Rajasthan and Warora in Maharashtra as part of a restructuring exercise.

The company has suffered a net loss of Rs 25.2 crore in the first six months of the year to December. The move, Electrolux Kelvinator feels, will help bring down costs and push it out of the red.

The company plans to outsource spares to remain cost-competitive. It already outsources compressors used in its refrigerators from Matsuhita, Tecumseh and BPL.

“The board has decided to reduce the manpower in these two units at a meeting held in August,” managing director and CEO Rajeev Karwal said. These two units employ around 1, 600 people.

The company is yet to decide on the optimum manpower level at these two factories. “We are doing a study on maximum output per employee, per shift and per work station. Once that is done, we will be able to decide on the number,” Karwal said.

“The study on the Shahjanpur plant will be completed by September 15. The study on the Warora plant will begin next month. We are planning a similar exercise for our washing machine manufacturing plant at Butibori near Nagpur,” he said.

The company closed down its compressor-manufacturing unit at Nandlur in Andhra Pradesh last month. The company offered voluntary retirement schemes to 635 people. “The unit was manufacturing CFC-compatible compressors. Since the government banned CFC refrigerators we had no other choice but to close down the unit,” he added.

The company had earlier decided to relocate its front-loading washing machine facility at Gurgaon. The factory came into the company’s fold following the acquisition of Intron about four years ago. “We will take a call on the factory soon,” he said.

The company had cut its staff strength to 2,100 this year from 3,600 on December 2002 as part of a restructuring exercise a few months ago. The company plans to come up with a rights issue of Rs 200 crore. The application for the issue is with Sebi.

Product launches

Electrolux Kelvinator, which today launched three products in the direct cool refrigerator segment — OxySwing, OxyFresh and OxyCool — will foray into the microwave oven and air-conditioner segment later this year.

The company is also planning to import seven new models of frost-free refrigerators from its parent, AB Electrolux, and launch the products here.