August 14, 2020 (MLN): The appliance sector has been experiencing strong recovery after the easing of lockdown and improvement in economic dynamics, the Chief Executive Officer of Waves Singer Pakistan Limited, Mr. Haroon Khan informed in a webinar hosted by BMA Capital Management.
Commenting further on the factors that led to the recovery, the CEO said that the decline in interest rates by 625 basis points had been another major factor that contributed to the increased sales for appliances, as customers were able to obtain cheaper financing options to make the purchases.
The CEO also credited the opening of businesses across the country for an increase in demand for appliances and hoped that the opening of remaining businesses such as marriage halls, restaurants, and hotels will further boost the momentum.
According to BMA Research, Waves Singer Company, which currently holds a market share of 31% for the deep freezer and 7% for refrigerators, is expecting a higher increase in demand for the latter as it has significant potential to post growth going forward.
While the deep freezer segment is operating at its full capacity, the refrigerator segment is utilizing around 70% to 75% of its overall capacity, the CEO said. However, he was hopeful of an improvement in the capacity utilization of all the segments once the adverse business environment created due to COVID-19 ends.
The management of the company is also planning to use both of its brands, i.e. Waves and Singer, to meet the needs of consumers belonging to different income brackets.
The CEO also spoke about how the appliance industry remains exposed to currency risks, as most of the raw materials are not locally available and therefore have to be imported. He also attributed the weaker margins of the company that were witnessed in the past to exchange rate risk.
Waves Singer Company also recently approved the Increase in Authorized Share Capital of the Company from PKR 2,000,000,000/- to PKR 3,000,000,000/- subject to the completion of necessary corporate and regulatory formalities.
The Board also approved the amendment in the Object Clause and other clauses of the Memorandum of Association (MOA) to add development of Affordable Housing Projects and all related Real Estate development activities into the Principal lines of business of the Company subject to the approval of Shareholders and Securities and Exchange Commission of Pakistan “SECP” and other relevant authorities.
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