Samsung bets big on flat screen TVs

Korean chaebol Samsung is betting on flat screen TVs to expand its market share in the domestic colour television market.

Flat screen models now occupy about 30 per cent of all CTV sold in India. This is expected to go up to 40 per cent in 2005 and then to 80 per cent by 2007.

Samsung has 22 per cent market share in this segment, while its overall share is about 15 per cent. "As the price differential between curves and flat models reduce over time, the market is set to grow. For the entry level, the differential is only 5-8 per cent now.

We are focusing our energy on flat models as a paradigm shift is taking place in the market place," Ravinder Zutshi, director of Samsung, said.

The company has CTV manufacturing facility at Noida with capacity of 1.5 million sets. With the volume of 9.6 million projected by the industry for the entire Indian market in 2005, Samsung is well placed to cater to the increased demand.

However, if the free trade agreement (FTA) with Thailand comes into effect, further expansion of capacity in India could be an issue. The excise duty on CTV was pegged at 16.5 per cent while the proposed import duty on electronics good coming from Thailand would be 12.5 per cent.

This would lead to an inverted duty structure. Zutshi said representative body CETMA (Consumer Electronics and Television Manufacturers Association) has taken up the issue with the government.

"We have made huge investment in India over last nine years and Samsung does not want that to go in vain," he added.

Zutshi was in Kolkata to flag off a promotional campaign, 'Pinning toh winning offer' for the festival month in the country.

The company is offering Rs 100 crore worth of gift during the period while expecting sale of Rs 575 crore. It has tied up with Shopper's Stop for special offer. Overall, it is expecting turnover of Rs 5,200 crore over last year of Rs 3,700 crore.

Samsung will be investing $ 5 million in the next fiscal for vertical integration exercise. It will set up a heat exchange plant for air conditioners. This used to be outsourced before but now the company plans to manufacture on its own.