Consumer durables major LG Electronics is planning to set up a facility in the southern part of the country — either in Chennai or Hyderabad — in the next three years “as part of its efforts to make India its manufacturing hub”.
“We have a strong domestic demand here. However, the only factor of concern is that India is still lagging other markets in terms of components supply. Hence, component manufacturing needs to be increased. The current capacities at our Ranjangaon facility near Pune are sufficient to cater to the demand for the next three years and our second phase of expansion will be down south, which will help us enhance supplies to the domestic market besides increasing export volumes,” Korean electronics major's India managing director Moon B Shin told the media here.
Shin, who was in Hyderabad to inaugurate LG's Brand Shoppe outlet on Friday, said the company would export high-end televisions and refrigerators from the south facility. He, however, declined to comment on the investments that the company intends to infuse into the proposed facility.
LG Electronics India currently imports about 10 per cent of its products including LCD and LED display televisions and high-end touch and 3G-enabled mobile handsets.
Its exports from the country touched $350 million (approximately Rs 1,645 crore) in 2008.
Stating that the Indian market was unaffected by the economic downturn, Shin said flat panel LCD televisions and GSM phones was contributing 12 per cent to LG India's revenues, which was expected to grow to 50 per cent over the next five years.
LG India, which reported revenues of Rs 10,730 crore in 2008, anticipates its revenues to touch Rs 13,000 crore this year.
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The company also plans to double its R&D spend from the present Rs 200 crore over the next three years “to create India-specific products”. Shin said the company had lined up new product roll outs including LED display televisions and 5.1 channel speaker systems in the next three months besides adding 10 touch and 3G-enabled handset models to its GSM portfolio within six months from now.
“LG India currently contributes about 6 per cent to the parent’s global revenues. We expect this to grow to 15 per cent in the next five years,” he added.