Philips India eyes to double turnover to Rs 5000 cr by '07

The Netherlands-headquartered Royal Philips Electronics is betting big on the Asia-Pacific region.

With its main markets, Europe and North America, facing slow growth prospects, the consumer electronics, lifestyle and technology company has turned its attention to the region, with greater emphasis being placed on the Asian market.

What is more, Philips India, has set a target of doubling its turnover from Rs 2,500 crore to Rs 5,000 crore by 2007.

Andreas Wente, president & chief executive officer of Royal Philips Electronics, Asia Pacific, told journalists at the Philips Asian Technology Meet, "During the last few years we have undergone a transformation to 'put our house in order', by becoming a leaner and more aligned company."

It is increasingly moving away from a traditional manufacturing company and is investing in research and development and building its brand.

Royal Philips spends around nine per cent of its revenues on research & development (R&D).

"Going forward, our focus will be on R&D. We do not have any plans to increase our investments in manufacturing facilities," Wente added.

Towards this end, the company is looking at entering new markets and creating whole new categories of products. Royal Philips has set itself the target of growing its worldwide revenues by 7-10 per cent every year.

If Asia-Pacific is the driver for Royal Philips Electronics in terms of geography, it will be healthcare in terms of business.

In the next five years, healthcare is expected to become the largest contributor to its overall revenues.

Philips has projected a double digit growth rate from the Asia-Pacific region in 2004-2005. Last year, around 25 per cent of the company's sales came from APAC.

"Our target for the future is to earn one-third of our revenues from the region by 2008," Wente said.

The company is also jacking up its investments in R&D in Singapore, India and China. The economic development in these countries was the main reason for Philips looking at the Asia Pacific market for investment.

It has launched InnoHub, an integrated test bed facility to test and fine-tune products developed at the Philips Innovation Campus in Singapore.

InnoHub has been introduced as a part of its $90 million investment in Singapore in a bid to accelerate its strategy to provide products that enable seamless connectivity.

In India, it is planning to double its workforce of 1,300 people at the Philips innovation campus by 2007 and will be making an investment of $50 million in infrastructure.

Philips has 15 R&D centres in China and 20 joint ventures across various businesses. It has targeted an increase in turnover to $12 billion by 2007 from $7.5 billion in 2003.

Philips China contributes 10 per cent to the Philips Asia -Pacific region.

The correspondent's trip to Shanghai was sponsored by Philips