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LG Electronics fares well during Diwali

Our Bureau

PUNE, Dec. 6

IN line with LG Electronics overall strategy of turning its Indian subsidiary into an export hub for most of the South Asian countries, LG Electronics India Ltd., (LGEIL) has decided to sub-contract manufacturing of TV and white goods. 5The company has z eroed in on Nasik, Kolkata, Bhopal, Chennai and Mohali to initiate contract manufacturing in addition to its current contract manufacturing tie-ups in Mohali and Hyderabad.

Talking to presspersons, Dr. Y. V. Verma, Vice-President, HR & MS, said this is being done with an objective of supplementing its manufacturing presence in the country. It currently manufactures all its products from its facility at Greater Noida in Utta r Pradesh. LGEIL is aiming to achieve sales of 2.8 lakhs CTV (colour television) units from eight contract manufacturing units across the country.

In Maharashtra, Mr. Verma said it has tied up for contract manufacturing with Nasik-based Polygenta, which would cater to the entire market of the State. This unit would manufacture the Cineplus range of CTVs that contributes to about 30 per cent of LGEI Ls all India sales.

About 6,50,000 units of Cineplus CTV is currently being manufactured at Noida catering to the domestic and OEM market. Polygenta has started the manufacturing of consumer electronics from April 2001 and is producing CTVs for BPL, AIWA, TCL and Salora. Wi th the manufacturing capacity of 50,000 CTVs per annum, this unit would start the production for LGEIL from December 15, 2001.

LGEIL will be able to record a savings of Rs. 1.92 crore in 2002, Dr. Verma pointed out. Looking at the Maharashtra market he said LGEIL has identified the State as its priority market.

Currently, the State is expected to contribute 12 per cent to the total turnover of the company during 2001. LGEIL during 2002, is planning to launch three new models of CTV, two models of direct cool refrigerators, five models of frost-free refrigerator s, two models in the air conditioner segment and would also be introducing package units of air conditioners. The price of these package units would range between Rs. 3 lakh and Rs15 lakh. The market share of CTV in the State is 11 per cent and is estima ted to increase to 15 per cent during the next calendar year.

In the refrigerator segments, LGEIL is planning to revamp the entire range and six new models are expected to hit the market.

Giving the break up figures of its products, he said with the contract manufacturing tie-up in the State, it is expected to increase its market share of frost-free refrigerator from its current 29 per cent to 35 per cent by December 2002.

The market share of direct cool refrigerator would increase from nine per cent to 12 per cent, semi auto washing macjines from 18 per cent to 22 per cent, fully auto washing machines from 30 per cent to 35 per cent, microwave ovens from 28 per cent to 32 per cent and air conditioners from 22 per cent to 30 per cent.

Giving a brief on the festive performance during Diwali (October 15- November 14), Dr. Verma said LGEIL has recorded sales turnover of Rs. 297.15 crore, registering a growth of 43 per cent over the corresponding period last year.

This is despite the notable slump in the industry growth, he pointed out. The contribution from Maharashtra is to the tune of Rs. 45 crore. If Mumbai and Vidharba regions were excluded, the sales turnover was Rs. 18 crore. During this period, CTV sales w as 1,15,300 units as compared to 60,000 units during the corresponding period last year, recording a growth of 92.17 per cent. In the frost-free refrigerator segment it had sold 15,250 units as compared to 9,300 units, a growth of 63.98 per cent. The air conditioners and microwave segments had recorded a growth of 60 per cent each", he said.

Dr. Verma said LGEIL is hoping to achieve an export target of $20 million up from the current figure of $10 million.

Apart from its existing export markets of Sri Lanka, the UAE, Bangladesh and the Philippines, it would be tapping the markets of Hong Kong, New Zealand and South Africa next year for exports, he added.