Samsung set to make Chennai S Asia hub

Korean durables major Samsung Electronics is looking to convert its new facility in Chennai into a manufacturing hub to source products to the south Asian region.

In line with this, the company is close to signing a Memorandum of Understanding (MoU) with Singer Sri Lanka to retail its products in the island nation.

Samsung's Indian operations predicts an 80 per cent increase in business from countries such as Sri Lanka, Bangladesh, Nepal, Bhutan and Maldives. The firm intends to synergise its southwest Asian operations through the Chennai facility.

The company would be investing about Rs 445 crore till 2011 in the facility, which would manufacture colour television and monitors, refrigerators, air conditioners, washing machines, printers, LCD TVs and LCD monitors. Currently, the company caters to the market through its Noida plant apart from facilities in Malaysia, Thailand, Vietnam and China.

"The Chennai plant will enable the company to keep logistics under control and offer better product customisation. It would be strategically located to cater to the Sri Lankan market in particular," a company executive said.

The company executives are extremely bullish on exports to the Sri Lankan market. The company intends to double its market share in the island nation from current 20 per cent by the year-end.

Samsung plans to penetrate the colour TV market with a target of 40 per cent share. In the refrigeration segment, it aims to garner a 15-20 per cent market share from the 10 per cent registered last year.

According to the company executives, the deal with Singer is expected to enhance Samsung's footprints in the Sri Lankan market with access to more than 130 retail points. Currently, the products are sold through 35 retail points.

The company also plans to open an office in Sri Lanka in the second quarter of this year. Samsung enjoys a leadership position in frost-free refrigerators in Bangladesh and flat TVs in Nepal and it estimates colour TVs, audio DVDs, refrigerators, washing machines and microwave ovens to drive sales in the region.

Earlier this year, Samsung appointed H B Lee as the regional president of the southwest Asia region.