Murali Sivaraman of Philips aims to make India export hub for kitchen devices

KOLKATA: Two years into his role as the global CEO of Philips' domestic appliances division, which is part of the company's consumer lifestyle business, Murali Sivaraman is making India a critical part of it, both in terms of revenue and innovation. His goal is to turn India into a global export hub for kitchen appliances and push it up the rankings of Philips' top markets.

However, he's got some challenges to overcome — including currency depreciation in India, which is pushing up product prices and shrinking disposable incomes of consumers. Sivaraman, however, says that's a situation which is not peculiar to India but the entire BRIC bloc (Brazil, Russia, India and China) where Philips' domestic appliances business, which includes kitchen appliances, garment care, air purifiers and floor care, has been growing at a healthy double-digit pace.

Sivaraman acknowledges the currency and economic challenges, but says they don't keep him up at night. "For the huge young consumer base and burgeoning middle-class, aspiration for a better lifestyle is growing. And since the business is to do with products of daily use, consumers will still buy a salad chopper or a rice cooker. Any impact will be short term," he says.

Today, Sivaraman is one of the few Indians who have made it big globally in the consumer electronics space. He's a key member of Philips' top team, with his division becoming the largest contributor to the Dutch major's consumer lifestyle business, after it shed the home entertainment business early this year.

Within months of taking this global role, the business made two acquisitions of kitchen appliance makers —Preethi in India and Povos in China. The division, which used to contribute some 15% to Philips' consumer lifestyle business revenue in 2000, now accounts for more than 45%. Philips under Sivaraman has quadrupled the number of new launches and has recently entered newer markets like Japan with a portfolio of kitchen appliances.

When Sivaraman took charge of Philips India BSE -1.26 % in 2007 as its CEO and MD after spending two decades in ICI, the Dutch company was a troubled one. Sivaraman inducted a spate of senior professionals, undertook two successful acquisitions (Aplha X-Ray Technologies and Meditronics) in the healthcare space and also licensed the television business to Videocon BSE 0.79 %.

A chartered accountant with an MBA from IIM Ahmedabad, who recently completed the advanced management programme atHarvard Business School, Sivaraman today has picked up quite a bit of technical acumen. He now spends much of his time on 'reverse engineering' to develop locally relevant products.

For instance, Sivaraman's team is working on ways to convert a rice cooker into a biryani maker, or the noodle and soy milk makers sold in China into pasta or soup makers for European markets. For this, Philips has completely integrated its two acquisitions and now leverages their R&D facility. For instance, the Povos unit in China is leading product development based on heating base platform such as induction cooktops or rice cookers. The Preethi facility in Chennai has become a hub for motor-based products such as newer forms of juicers, mixers, grinders, meat mincers or vegetable cutters. This facility is working closely with the Austria R&D unit.

"India especially holds special interest for us, due to its huge market opportunity where we want to launch newer global products such as air purifiers and soup makers. We also want to develop India as an export hub and a global supply base for kitchen appliances," says Sivaraman.

India already ranks amongst the top five markets for Philips's domestic appliances business. Sivaraman now wants to grow it further, since it's one of the fastest-growing geographies. And whenever he's in India, Sivaraman makes sure he spends time at retail outlets — "Businesses can be made or broken in the shopfloor. Such visits help us to understand how to make global products relevant for India. The Indian team has a big shopping basket to choose from our global portfolio, but it has to ensure me healthy business returns," he says.