Samtel in CPT deal with Thomson

Samtel Color, the integrated manufacturers of colour picture tubes (CPTs) has entered into an agreement with Thomson Tubes Displays SA (Thomson) of France to sell 700,000 CPTs per annum for the next three years and expects to add nearly Rs 115 crore to its topline annually through this deal.

As per the agreement, Thomson would be sourcing CPTs of sizes 14 inch, 20 inch, 21 inch and 21 inch flat from Samtel. It will sell 150,000 CPTs from September to December this year, and 700,000 CPTs per year till 2007, totalling a supply commitment of 2.25 million CPTs to Thomson.

The contract is subject to detailed conditions as laid out in the commercial agreement between Samtel and Thomson. "Thomson would be our agent through which we will enter the European market. With this agreement we will be able to touch a sales figure of 5.6 million," Sanjeev Kakaria, CEO of Samtel Color, told Business Standard.

"The average price of CPTs in the western market is about $35 and we aim to earn nearly Rs 115 crore through this deal," Kakaria added.

Samtel has also entered into technology and technical support agreement with Thomson for product design and technical support for producing 29 inches super flat CPTs.

The company is in the process of establishing manufacturing line to produce 29 inch CPTs, which is expected to be commissioned sometime in April 2005. It has invested about Rs 110 crore on this production line which will come up in its Sahibabad plant.

The company is betting heavily on 29 inch CPTs and sees major revenue growth coming from that section. "The market for higher end products is increasing and we expect good sales once the screens become available commercially in 2005. We would also be using the technical expertise of Thomson for the production of this line," Kakaria said.

In financial year 2004, Samtel Color had produced 4.3 million CPTs and in the first quarter of 2004-05, it produced 1.3 million CPTs with a net revenue growth of 92 per cent to Rs 240.40 crore.