The Hindu : Business : LG's Pune facility on stream

Online edition of India's National Newspaper
Wednesday, Mar 23, 2005

Business

Business

LG's Pune facility on stream

By Ramnath Subbu

PUNE, MARCH 22 . LG Electronics India (Pvt.) Ltd. (LGEIL), a subsidiary of the Korean consumer electronics major, LG Electronics, today announced that there will be an increase of 5-10 per cent in prices across all categories of its products from April.

While formally announcing the commencement of its first GSM mobile phone plant in Ranjangaon near here, K. R. Kim, President, South West Asia, LG Electronics, and Managing Director, LGEIL, said the price increase was necessitated by the budget impact and rise in raw material prices namely steel, copper and aluminium. .

LGEIL's second facility is located at Noida in Uttar Pradesh. The Pune facility inaugurated in October last can make colour TVs, air conditioners, refrigerators, washing machines, microwave ovens, colour monitors and GSM handsets. The facility has a capacity to make five lakh CTVs, one lakh ACs, five lakh refrigerators, 50,000 microwave ovens, one million mobile phones and one lakh monitors. The company has invested Rs. 150 crores in this facility. It also plans to establish India as an R&D hub for consumer electronics, home appliances and GSM phones.

The second building dedicated mainly for GSM phones would be ready by August and now the company is selling phones in the semi knocked down (SKD) condition imported mainly from Korea. Further, LGEIL plans to make CDMA phones from the Pune facility. "The CDMA phone capacity next year will be two million units annually and by 2007, it will go up to three million units.'' Mr. Kim said in the current year, LG was targeting 10 per cent of its total sales coming from the Pune facility (around Rs. 900 crores). This share would go up by 10 per cent every year for the next two years.

In personal computers, the company makes desktop PCs, notebooks and peripherals and monitors. It exports PCs to SAARC countries, West Asia and Africa. Mr. Kim said the company was targeting five lakh units for exports. "The PCs are made at the Noida facility and we are looking to move this to Pune in future.''

Addressing visiting presspersons, Mr. Kim said, "The infusion of funds over the next five years to achieve our goal will be close to $250 million. The Pune factory is in line with the company's vision of making India the global export hub.''

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