The Hindu Business Line : LG India aims Rs 15,000-cr turnover by 2007 — To invest Rs 1,000 crore in domestic operations

Sunil Gavaskar, K. Srikkanth, Sourav Ganguly and the new brand ambassador of LG, Yuvraj Singh, going round the LG plant at Greater Noida on Wednesday. — Kamal Narang

New Delhi , May 12

LG ELECTRONICS India Pvt Ltd (LGEIL), the Indian subsidiary of Korean consumer electronics major LG Electronics is targeting a turnover of Rs 15,000 crore by 2007 and proposes to close the current calendar year with a turnover of Rs 7,000 crore.

LGEIL, which celebrated its seventh anniversary today, also plans to pump in around Rs 1,000 crore in domestic operations in the next three years.

Elaborating on the investment, Mr K.R. Kim, Managing Director, LGEIL, said, ``Almost 50 per cent of the investment will be in various expansion projects and the rest in new product launches. This year, the total investments would be close to Rs 250 crore on the existing business.''

Of the Rs 250 crore, the company will invest Rs 175 crore this year in its second factory in Pune.

``Over the next three years, we will be investing another Rs 300 crore in the Pune factory,'' Mr Kim told Business Line. When asked on how the company proposed to raise these funds, Mr Kim said, ``The investments would be made through internal accruals as our business and cash flow is good.''

With the opening of the Pune factory, LG Electronics expects the increase in contribution from the Indian subsidiary to go from the current five per cent to 10 per cent by the year 2010.

On the exports front, LGEIL targets a revenue of $70 million this year. By 2007, the company expects to clock exports worth $120 million.

Commenting on whether the company felt threatened by the entry of Chinese players into the Indian market, Mr Kim said, ``The Indian consumer is very price and quality conscious. Only those who can meet both the demands can succeed.'' He said as far as the Chinese players were concerned, their track record in the Indian market had not been impressive.

``LG believes in beating competition by offering quality products,'' he said.

On how the company tackled fluctuations in raw material prices, Mr Kim stated, ``Any increase will not be transferred to the market. We keep working on cost innovations.''

The company also announced cricketer Yuvraj Singh as the brand ambassador for its premium range of products to begin with GSM mobile phones. The company proposes to become a key player in the mobile market, which it entered in late 2003.

For January-April 2004 vis-à-vis January-April 2003, the company achieved a growth of 38 per cent in the consumer electronics segment, 51 per cent in home appliances and 69 per cent in IT business. LGEIL has clocked a 53 per cent growth in sales in the period, to record a sales turnover of over Rs 1,000 crore.

The company has recorded a 119 per cent volume growth in the flat TV segment during the period, 61 per cent in refrigerators, 21 per cent in washing machines, 45 per cent in microwaves and 75 per cent in air conditioners.

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