Acquired Italian brands to help Walton phase out non-inverter compressors

Walton Hi-Tech Industries will phase out environment-unfriendly non-inverter compressors from all its products by the end of this year, according to the local electronic giant's Managing Director and CEO Golam Murshed.

This transformation has been made possible through the company's drive to go global and green that steered its 2022 acquisition of three Italian compressor brands — ACC, Zanussi Elettromeccanica (ZEM) and Verdichter (VOE)— along with all their assets, except for the factory land and buildings in Italy.

"The Italian compressor manufacturing line is being shifted to our local plant. Having all the tasks accomplished by the end of this year, we will manufacture the most advanced inverter technology compressors there," said Murshed.

Inverter technology, used in refrigerators and air conditioners, helps save 50%-60% of electricity, he mentioned.

The new line, capable of manufacturing 3.2 million compressors a year, will raise Walton's annual compressor capacity to 4.8 million, he added.

The publicly traded company in April 2017 started non-inverter technology compatible compressor manufacturing for the first time in South Asia, making Bangladesh the eighth in Asia and the fifteenth country in the world to manufacture the equipment.

The Walton MD said, "Currently, the majority of our own products are energy saving ones and after December we will not manufacture any non-inverter refrigerator, air-conditioner."

Inverter compressors are being imported now and the new line will help substitute the imports, he added.

The company expects to consume 80% of the inverter-compatible compressors for its own products and the rest will be sold to other brands home and abroad.

However, the first line will keep manufacturing non-inverter compressors as other brands at home and abroad need them, Murshed further said.

Walton started manufacturing refrigerators in 2008 with compressors manufactured by Italia Wanbao-ACC, the owner of Walton's three acquired brands.

Walton now controls over 60% of the domestic electronics home appliance market, occupying over two-thirds of the local refrigerator market, around half of the television, and one-third of the air conditioner market.

The company currently exports home electronics products to around 40 countries including many American, European and Middle-Eastern ones.

The Italian company, on the other hand, has been operating for more than 50 years, with business in 57 countries. Despite having technological strength, reputation, and a good market share, it had been struggling mainly because of being a state-run one.

In 2014, it was taken over by the Chinese multinational Wanbao Group Compressor Co Ltd, which came to an agreement with the Italian government to keep the factories in Belluno, Italy, in operation, committing itself to make investments.

Italy's Ministry of Economic Development, in an international tender last year, awarded the Wanbao-ACC production lines to Walton for a sum yet to be disclosed.

Golam Murshed, while talking to The Business Standard this week, declined to disclose the investment size as the total cost of acquisition and plant shifting was yet to be adopted in the board meeting.

A senior Walton official, however, said the estimated project value was around Tk250 crore and the final sum would depend on the extent of modernization of the line and dollar rate.