LG to invest Rs 100 crore for Pune plant

LG Electronics India Pvt Ltd, a wholly owned consumer durables subsidiary of South Korean-based LG Electronics, has announced that it will invest Rs 100 crore during this calendar year.

This investment will be used for setting up its new plant in Pune, expanding existing facility in Noida, as well as focus on R&D to cater to the Indian market.

Speaking to mediapersons on the sidelines of a product launch, Kwang-Ro Kim, managing director, LG Electronics India Pvt Ltd, said, "The Pune facility is scheduled to be completed by July. This facility will have a capacity to manufacture 2 lakh TVs and 2 lakh refrigerators per annum. Our R&D effort will focus on bringing out more goods that are suited for the Indian market."

Currently, home appliances account for 45 per cent of LG's topline. So far, the company has invested Rs 500 crore in its Noida plant.

The acceptance of LG as a brand has also resulted in huge promotional activities.

The company is seen to be associated with every major event in India, including the on-going cricket series in Pakistan. It has set aside 5 per cent of its revenues for marketing and promotional activities.

LG plans to register a 75 per cent increase in topline to touch Rs 7000 crore by the end of December 2004. Nearly 50 per cent of these revenues are expected to come from up-country consumers, who are showing keen interest in LG's products.

Revenues from exports is expected to touch $ 70 million this year, when compared to $ 40 million last year.

According to Kwang-Ro Kim, managing director, LG Electronics India Pvt Ltd, "We feel that the rural market will grow faster then major cites and towns. We are increasing our focus on up-country marketing as our sales in these markets is encouraging. We will expand our customer care centres to 206, spanning 141 cities."

He said that LG has assigned a team of over 1500 engineers for a speedy service to up-country consumers. About 100 mobile service vans with generators have also introduced to cater to customer complaints during power cuts.

On the company's focus in Karnataka, Kim said, "We are targeting sales of five lakh GSM mobile handsets in the current calendar year with Karnataka contributing to 10 per cent of the sales. This will translate to Rs 350 crore in revenues."