LG Electronics-Growth at 100%,plans more mfg units,sales to cross 1000 cr ($228 mil) in 99
lgeil.com
Vipin Kumar
NEW DELHI, Nov. 14
WITH its annual sales set to cross Rs. 1,000 crores ($228 million) in the current year, LG Electronics India Pvt Ltd is considering setting up more manufacturing facilities in India as part of its expansion plans, a top company official has said.
"India is a very important market for us and we are very satisfied with LG's performance here so far. Now we are looking at expanding our manufacturing facilities by setting up plants in the southern and eastern parts of India," Mr. K.S. Cho, Executive Vice-President, Overseas Operations of LG Electronics Inc, told Business Line here today.
Mr. Cho did not commit himself to a time-frame for the proposed expansion, but said the future investments by LG in its Indian subsidiary would not be less than $50 millions.
According to Mr. Ajay Kapila, General Manager (sales), LG Electronics India Pvt Ltd, the company would first embark upon expanding its existing manufacturing facility based at Greater Noida before setting up the new plants elsewhere in India.
"LG in India is growing at a rate of well over 100 per cent. At this growth rate, we will have to expand our Greater Noida plant and might need more facilities in other parts of the country. This would help us tackle the logistics issues," he said.
Mr. Kapila said LG, which started operations in May 1997, was optimistic of crossing the Rs. 1,000-crore turnover in 1999 and had already achieved a turnover of Rs. 865 crores till October. During 1998, the company had clocked a turnover of Rs. 480 crores.
While LG's market share in colour televisions is now 10 per cent, that in white goods and refrigerators is around 34 per cent and 37 per cent respectively, Mr. Kapila claimed.
"We will launch 12 new colour television models in the first half of the next year. This should help us reach a market share of 13 per cent in 2000," Mr. Kapila said, adding that an Internet compatible television, likely to be priced about Rs. 70,000, would also be introduced in this period.
As part of strengthening the marketing network, LG would add 1,000 more dealers to take the total number of dealers to 4,000 by the end of the year 2000. Also on the anvil were plans to start manufacturing 'no-frost' refrigerator range in India.
Asked about entering the audio segment, Mr. Kapila said LG was waiting for the market to `stabilise' before launching the products. "We are going to do a serious study on the audio market next year. A final decision on launching LG's audio products in India would be taken only after that," Mr. Kapila said.
No immediate plans for computer monitors: Though India is riding high on the information technology wave, LG, the world's second largest computer monitor maker (in terms of numbers), thinks that time is not yet ripe enough for it to start manufacturing its monitors here.
According to Mr. Cho, the high duty structure in India and people's preference for 14 and 15 inch monitors are the major factors withholding LG from taking up computer monitor making in the country.
"We do not believe in importing parts like picture tubes and assembling them here. If we are to manufacture monitors, we would make critical components on our own rather than outsourcing them. Besides, in India, the market is for 14 and 15 inch monitors whereas worldwide the market is for 17 inch and bigger screens. We will have to change this perception as well," Mr. Cho said.
However, LG has already started testing the Indian market for its monitors and any decision on manufacturing would hinge on the outcome of these market studies, Mr. Cho said. |
