Bpl Plans Plants Abroad To Access Global Markets

Consumer electronics giant BPL is planning to set up at least three colour television manufacturing units abroad as part of a major foray into global markets.

We are planning at least two units in the European Union and one in the UAE, revealed TPG Nambiar, chairman of the Rs 3,200 crore group. We hope to finalise the details soon, Nambiar told Business Standard in an exclusive interview.

To begin with, the group may set up a CTV assembly line off London to cater to the European market, said Nambiar. He said the group had chosen a London suburb which offered tax benefits, low freight and proximity to colour picture tube producers.

 

Sanyo of Japan, which has a strategic alliance with BPL, had asked the Bangalore-based group to take over one of its units in Spain some time ago. But BPL declined the offer. According to Nambiar, the group thought that servicing European markets from the tip of Spain would entail heavy costs. Besides, BPLs price competitiveness would have been hit by the hefty freight cost involved in bringing in colour picture tubes and exporting finished goods.

Apart from a CTV assembly unit near London, BPL may set up a similar facility in Germany. A manufacturing base in Germany would come in handy to service many neighbouring nations, said Nambiar, adding, One could even service East European markets from this unit.

BPL plans to set up its own plants in Europe due to the heavy duty levied on CTV exports from India. Said Nambiar: The 14% duty slapped by the EU erodes competitiveness even if someone wants to forgo margin to build up marketshare there.

BPL also has the Gulf market in its sights. It may set up a plant in one of the Asean countries. Said Nambiar: If we can service some Asean markets from the UAE, it is fine. Or, one has to think of a unit for the Asean market itself.

BPLs think-tank is also bullish on the CIS. However, the group is treading cautiously due to fear of exchange and payment problems. I am not ruling out the possibility of a BPL manufacturing base in CIS, but it may have to wait for a while, said Nambiar.