Haier set to start local production

Haier Appliances India Pvt Ltd, the fully-owned subsidiary of the $12.9 billion Chinese multinational Haier group, is planning to set up a manufacturing facility in India, three years after it began operations in the country. This is in line with the company's plans for a greater share of the Rs 18,000 crore domestic consumer electronics market.

Haier India, which currently outsources its production to external partners for most of its products on offer in the domestic market, will continue its relationship with its eight partners, while also taking onboard some of the manufacturing itself. This would enable it to be a more serious contender, even as it has set its sights on becoming one of the top three players here by 2010.

"We are in the mode of internal discussion on the manufacturing facility and are currently studying its viability. The concrete details on what we will manufacture and how much will be the investment will only emerge at the end of the present financial year,"

Haier India Director and COO Pranay Dhabhai said.

Dhabhai, however, remained tight-lipped on what would be manufactured in the new facility or by when it would begin production.

By now, the company has achieved 75 per cent content localisation for televisions and air-conditioners, while importing flat panel televisions (plasma and LCD), microwave ovens and parts for washing machines and DVD players. This adds up to a ratio of 60:40 for domestically produced to imported content.

Haier India achieved a turnover of Rs 325 crore in 2005, which is expected to cross Rs 400 crore this year, owing to the consolidation mode that the company is currently on. In order to be on track to achieve its goals, Dhabhai said the turnover should at least double next year. "To be among the top three, we need to have a turnover in excess of Rs 4,500 crore by 2010 (including mobile phone sales)," he said.

The company is also strengthening its retail presence and plans to increase the number of exclusive outlets to about 40 by 2007. Currently, its products are available in 21 exclusive outlets called Planet Haier stores and 4,500 multi-brand outlets.