The Hindu Business Line : LG Electronics may miss turnover target

CONSUMER electronics and white goods' giant LG Electronics may fall short of its turnover target this year while its proposed Chennai plant will have to wait for some more time.

LG Electronics Vice-President for sales, Mr Girish Rao, told Business Line that while the festive season saw some extremely good sales, the first half's poor show will drag down the total turnover for the (calendar) year by at least 11 per cent.

"We may finish the year with turnover of around Rs 8,000 crore instead of the targeted Rs 9,000 crore," Mr Rao said. But during the festive season, the company was able to achieve sales of around Rs 1,600 crore "which was much more than the targeted sales".

Mr Rao said the tsunami tragedy, floods in Mumbai and issues over VAT implementation had hit the sales hard during the first half of the year. However, LG Electronics, with around 29 per cent share in the consumer electronics market and between 34 per cent and 37 per cent share in the white goods market, continues to lead the pack, Mr Rao said.

He said the decision to invest around $250 million in the next five years will be carried out as per the plans. He said the first phase of the Pune plant has already been commissioned while the next phase will be operational soon. LG Electronics has invested around Rs 900 crore for setting up the Pune plant.

The plant has already started producing white goods such as washing machines and in the next phase, mobile handsets will be produced.

With the setting up of the Pune plant, Mr Rao said, the exports too have been given a major push. Last year, LG Electronics exported goods worth $40 million.

During this year, till October, around $100 million of white goods has already been exported, he said.

He, however, said that the proposed Chennai plant will not be set up next year. "It will definitely not happen during the next year," he said.

Mr Rao said the company is aiming at the number two slot once the Pune plant starts producing the handsets.

"We are way behind Nokia currently, but we expect to take the second spot soon," Mr Rao said.

He said handsets will now have content-rich features and the work on developing the software had already started. The company has also decided to increase the product range.

"We have started witnessing that Indians now replace their handsets within 12 months as against 16-18 months earlier," he said.

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