Samsung To Pump In Rs 1000 Crore

Samsung Electronics, the Korean technology giant, has lined up investment plans worth $215 million (approximately Rs 1,000 crore) for setting up white-goods manufacturing facilities in India in four years, according to company vice-president (global marketing ) S S Park.

He said the company would begin setting up white-goods making facility in the country with establishing an air-conditioning plant in July. The plant would produce high-end products only, leaving the country's low- and medium-end segment untouched to the local producers.

"Based on the response from the Indian market, where we now sell products sourced from outside the country, we have decided to start production of air-conditioner in India. However, we do not want to wage a battle with the local players who are basically in the low- and medium-end segment," he added.

 

The air-conditioner making facility, to be set up in Samsung Electronics India's Noida complex, would be ready for commercial operation by end of the calendar year. The investment cost for the unit has been pegged at Rs 20 crore.

According to Park, the air-conditioner business needs to produce at least 1 lakh units a year to reach the breakeven level. The air-conditioner plant will be Samsung Electronics India's second white-goods making facility in the country. It has now a microwave production unit at Noida with an installed capacity of 1 lakh units a year.

Samsung also plans to begin production of washing machines and refrigerators in the country within next 2-3 years. In addition, the company aims at entering into the domestic mobile market as soon as the CDMA (code division multiple access) is allowed in the country. "We are ready with the technology. We will enter into the market when CDMA is allowed in India," he said.

Samsung has already announced investment of $45 million to expand capacity of its colour television and colour monitor facilities.

During the current year, Samsung India Electronics targets a sales turnover of Rs 2,850 crore from its consumer electronics and home appliances businesses with the later expected to contribute 41 per cent of the company's revenue.

In the previous calendar year, the company had posted sales worth Rs 1,950 crore. Its product portfolio includes audio, video, colour television, refrigerators, microwave ovens and air-conditioners.

Globally, Samsung Electrnoics is implementing an advertisement policy, chalked out by the US advertisement major FCB. The company's advertisement billing in the current year is pegged to be in the region of $1 billion.

Through the advertisement and image building efforts, the company aims at enhancing its brand value to $11 billion from the current $6.4 billion in 2003. Should it happen, Samsung would overtake its Japanese rival Sony by 2003.