Financial Daily from THE HINDU group of publications
Tuesday, Mar 30, 2004
New Products & Services
Corporate - Outlook
LG India targets Rs 7,000-cr sales this fiscal
Mr Young-Ha Lee, Executive Vice-President & CEO of Digital Home Appliance Company, LG Electronics Inc, at the launch of TV refrigerator in the Capital on Monday. Kamal Narang
New Delhi , March 29
AFTER consolidating its position in the domestic market, the Korean white goods major LG Electronics India Pvt Ltd (LGEIL) is eyeing exports worth $70 million this fiscal, up from $40 million that it clocked in 2003.
Commenting on whether the company proposes to make India as the nodal centre for exports to the South-West Asia region, Mr K.R. Kim, Managing Director, LGEIL, said, "India in itself is such a huge market, hence, the focus of the company will be the domestic market. Besides, we will be competing with other LG outfits in the export market."
Currently West Asia and Africa are the focus regions for exports for LGEIL. The company is also exporting to Hong Kong, New Zealand, Sri Lanka and Bangladesh, to name a few.
LGEIL, the wholly-owned subsidiary of the Korean parent, has already invested Rs 100 crore over the last several months in the Indian operations through internal accruals.
"The investment has been used for the Pune factory and other expansion plans," Mr KIM said.
The company is looking at sales of Rs 7,000 crore this year. LGEIL contributes five per cent to LG Electronics' global sales.
On whether the company would be looking at an initial public offer, which has been in the offing for the last few years, Mr Kim said, "no, not this year."
Further, the company on Monday announced the launch of a hi-end product in India aimed at strengthening its digital product portfolio in the Asian sub-continent. Unveiling the TV refrigerator TV Dios, Mr Kim said, "the refrigerator brings together the best in food preservation and storage with multi-media functions as a quintessential digital home appliance."
TV Dios comes with a 13-inch hi-definition TFT LCD TV installed in the centre of its door. The 600 litres TV Dios, priced at Rs 2 lakh, also has a built-in radio tuner providing access to FM stations and is supported by built-in speakers. Launching this product in the Indian sub-continent, Mr Young-Ha Lee, Executive Vice-President & CEO of Digital Home Appliance Company, LG Electronics Inc said, "The product has been received very well in the US and the UK and we are confident it will do equally well in this part of the world."
On whether the company is going to roll out sub-Rs 5,000 range of refrigerators, Mr Ajay Bajaj, Product Group Head, Refrigerators, said, "the company had planned to do so, but due to the rise in input costs, it was deferred. However, the next couple of months will see a direct cool model in 150-160 litre capacities in the sub-Rs 5,000 range."
Currently, the company is manufacturing refrigerators up to 310 litres in its facilities in the country and would resume production of 400 litres once the Pune unit goes on stream, Mr Bajaj told Business Line.
Further, the company is outsourcing a very minuscule number of refrigerators from Voltas Ltd, he said. "We propose to outsource 50,000 units during the current year from Voltas. If the demand arises we are open to outsourcing from others."
Elaborating further, he said, only those capacities where the company was of the view that investments in moulds would not be feasible, it has opted for outsourcing. Besides, outsourcing in refrigerators category is not feasible in the long term as there is constant technology change in the product, he pointed out.
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