LG to ramp up Bhuj operations

Plans backward integration, to produce washing machines, DVD players too

LG Electronics will invest over Rs 250 crore in India in the next one year to set up manufacturing facilities for its products.

"Of the Rs 250 crore, the company will invest over Rs 100 crore for setting up a facility for manufacturing GSM mobile phones at Pune," K R Kim, managing director, LG Electronics India said.

The company plans to initially import mobile handset components from abroad. It will subsequently try to source them locally.

LG has recently set up a manufacturing unit at Bhuj in Kutch. The project has been set up with Jaipur-based Genus Electronics as a partner, with an investment of Rs 35 crore. It also plans to go in for backward integration, with facilities for mouldings and cartons on the cards.

"The Bhuj project is totally integrated for manufacturing colour televisions, with in-house assembly of PCB boards. We will also set up a facility for mouldings and carton boxes which will enable complete backward integration "" from sheet metal fabrication, moulding, paint shop to final assembly," said Kim.

The company is already a leader in the CTV segment with a market share of 25 per cent and 29 per cent market share in the refrigerators segment.

LG has also decided to set up a production facility for assembly of washing machines with an investment over Rs 25 crore. It will have a capacity of 2.5 lakh units per annum. The project will give direct employment to over 700 persons. "A turnover of Rs 300 crore is expected from the first year of start from LG's Bhuj project," Kim said.

The company is also planning to start production of microwave ovens and DVD players at Bhuj in the fourth quarter of 2005.

"We are also in talks to set up facilities in Kerala and Tamil Nadu for CTVs and other products," Kim said.

"We will be launching several new products in this year. During the seven years of its existence in India, LG has earned a premium brand positioning due to its superior quality, high product performance, revolutionary technological delivery and warm services. In fact today LG is recognised as leader in setting industry norms starting with the fast fastest ever-nationwide reach, latest global technology and product innovation," said Kim.

The company aims to achieve a turn over of Rs 6500 crore by the end of the current financial year and aims to be a dominant player in GSM mobile phone market with plans of setting up a new GSM plant in Pune.