Samsung Eyeing New Businesses

Samsung Electronics of S Korea is eyeing new telecom and consumer electronics markets like colour monitors, faxes, telephone instruments, mobile telephones and colour picture tubes.

It will route investments in these areas through its proposed 100 per cent subsidiary in the country. The S Korean conglomerate received government permission for a subsidiary in 1995, and will be forming a company in the next few months. Meanwhile, the company will be extending its investment schedule in India till 2000 AD. In 1996, it had announced investments of $ 630 million in various ventures in the country. While these were scheduled to be completed by 1999, the company now says it will drag on till the Third Millennium.

The market has not grown to our expectations. Growth has been stagnant, said Byung Mun Park, managing director, Samsung India Electronics Ltd. In 1996, Samsung sold 80,000 units of colour televisions, and this year they expect to sell 180,000 units.

Apart from administrative functions, the 100 per cent subsidiary will also manage Samsungs joint ventures in the country, and pursue investment opportunities in other sectors. Park said Samsung is evaluating several opportunities like entry into telecom products like mobile phones and telephone instruments.

Colour picture tubes are also high on the agenda though the company is wary of rushing into it.

Park said when plans for a CPT venture were formalised in 1994-95, hopes were very high of a fast growth rate. There is now caution as such hopes have been belied. A final decision, Park said, will be taken when a top-level team from Samsung Display Devices Co Ltd will be visiting India later this year.

Samsungs equity contribution to its total investment in India is to be around $200 million but the S Korean giant has only invested around $20 million so far. More funds will flow in as more factories are added to the companys electronic complex in Noida, Uttar Pradesh. The complex currently makes colour televisions, and will soon make refrigerators, washing machines, microwave ovens and audio products.

Samsung India Electronics, in which Samsung Electronics of S Korea has a 51 per cent stake, will soon hike its authorised capital from Rs 32 crore to Rs 100 crore to pave way for fresh investments in the refrigerator plant in Noida. The plant is expected to start production sometime in end-1998.