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Strategies & Market Trends : India Coffee House -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (3625)	1/31/1999 9:29:00 PM
From: Mohan Marette	Respond to of 12475

Consumer electronics majors strike gold in India Shubham Mukherjee -------------------------------------------------------------------------------- Consumer electronics majors strike gold in India Shubham Mukherjee -------------------------------------------------------------------------------- NEW DELHI 31 JANUARY RIDING HIGH on the consumer electronics and white goods boom, multinational majors which entered India only a few years ago have either started making profits or brought forward their break-even periods. Despite the industrial slowdown, major players like Sony, Samsung and LG have reached their break-even points and even posted token profits during 1998. While Sony and Samsung entered the market nearly three years ago, LG entered the Indian market a year later. Audio major Philips has managed to arrest its negative growth and posted a turnaround during 1998, while Panasonic, too, expects to turn around in the current year. A recent ORG survey for January-November 1998 highlights a 40-per cent growth in the consumer electronics segment, while the refrigerator and washing machine segments have grown by 21 per cent and 18 per cent. LG announced its break-even in August 1998 and recorded a turnover of Rs 600 crore in the first 20 months in India. LG has invested nearly $55m and plans to bring in investments worth $151m by 2001, which will go up to $300m by 2005. Beginning operations in May 1997, LG is understood to have already posted a profit of around Rs 42 lakh. Samsung India Electronics also announced its maiden profit of Rs 5 crore in 1998, its third year of operations in India. The company made a turnover of Rs 540 crore for the year and has targeted a profit of Rs 16 crore on a turnover of Rs 900 crore during 1999, a projected 67.7-per cent growth over 1998. The company's turnover grew 37 per cent over 1997. Its target of nearly doubling the turnover in 1999 involves increased focus in white goods in the overall product mix and improved productivity at the production site, company officials said. Both the Korean conglomerates - LG and Samsung - want to be among the top three consumer electronic companies in the country by 2001.1. Japanese major Sony broke even in 1997-98 when it clocked a profit of Rs 12 crore - two years ahead of initial plans. The company is targeting a turnover of Rs 1,000 crore by the year 2001-02.. During 1997-98, it achieved a turnover of Rs 400 crore and expects to clock a turnover of Rs 500 crore in the current financial year. Between April 1998 and January 1999, there has been a 23 per cent growth over the corresponding period of the previous year. Since 1995, Sony has invested nearly Rs 55 crore in its Indian operations. Baron International, part of the Baron group which distributes the Akai range of consumer electronic products, has recorded a profit after tax of Rs 40 crore on sales of Rs 875 crore for the year-ended June 1998. In the white goods segment, major white goods multinationals such as Whirlpool and Electrolux have advanced their break-even periods. At present, both the companies run loss-making operations in the country. Whirlpool of India Ltd has advanced its target break-even point to the last quarter of the current financial year against its earlier estimate of breaking even in 1999-2000. Whirlpool expects post operating profits during the period, at the rate of around 5 per cent of total sales. The turnaround is largely due to a nearly 70 per cent growth in sales during the year, company officials said. Its major competitor, the Swedish Electrolux, is also expecting a break-even in its refrigerator company Maharaja International during this year. Company officials base the calculations on the 80 per cent growth that Electolux registered in 1998. economictimes.com