LG to invest Rs 900 cr over three years

LG Electronics India announced today that it would invest Rs 900 crore in Ranjangaon plant near Pune over three years. Of this, Rs 300 crore would be invested in setting up a DVD writer plant, the first in India.

The company has signed a memorandum of understanding (MoU) with the Maharashtra government today. It will receive certain tax benefits from the state.

At the signing of the MoU, K R Kim, managing director, LG India, said 80 per cent of the DVD writers produced would be exported as the market was still not large enough in India.

LG is targetting a turnover of Rs 2,600 crore by 2008 from DVD writers. The company said that the rest of the Rs 900 crore would be spread over different product categories, and indicated that IT products would be a focus area.

S N Rai, senior general manager, said the company had so far focussed it's investments in China but it was now necessary to decentralise their manufacturing,as there was likely to be a global capacity shortage by 2008.

The state too has been extremely helpful, and based on these factors and India's proximity to Africa (which LG intends to start exports to) the company decided to increase its capacity in India. The additional manufacturing capacity is likely to translate into around 2000 jobs at the plant, the company said.

The Ranjangoan plant currently produces GSM handsets.