Financial Daily from THE HINDU group of publications
Thursday, Jan 20, 2005
LG Pune plant begins GSM phone production
Pune , Jan. 19
CONSUMER electronics and home appliances major LG Electronics is gearing up with aggressive plans to become the number two player in the fast growing market for GSM phones in the country.
The company's Ranjangaon plant, about 55 km from Pune, has started pilot production of two models of GSM phones this week and plans are being firmed up to close the calendar year with total sales of two million handsets, Mr Girish Rao, Vice-President-Sales, said here on Tuesday.
The company is also simultaneously working on pushing sales of its personal computers which is expected to jump from 40,000 units last year to 2,00,000 units this year.
With the domestic market for GSM phones growing at over thirty per cent every year, the company is planning to grab a huge slice of the market by manufacturing models locally instead of importing them so that it gets the advantage of reduced reducing time to market for new models, Mr Rao said. He added that production locally would also mean cheaper handsets for buyers.
``We want to grow by getting ahead in the volumes game,'' Mr Rao said. The company has already commenced manufacturing of models 1100 and 1600 and is preparing to launch an imported entry-level camera phone which is slated to be the cheapest in the market at Rs 7,000, by March this year.
``We will focus on camera phones and 3G technology in the current year,'' Mr Rao added. The company will start manufacturing more additional models within the next few months, he said.
The Ranjangaon plant, meanwhile, is also home to the company's R&D centre for GSM phones which will have a 200-member team to develop software for its handsets, Mr Rao said adding that the team will work on local language SMS, games and other services.
With the plant slated to be the manufacturing hub for markets in the SAARC countries, the R&D centre will also eventually work on country localisation for these, Mr Rao added.
The company is planning to produce 20 million units of mobile phones by 2010 of which 50 per cent will go towards exports, according to Mr Rao who said the manufacturing facility will involve an investment of $60 million by then.
LG Electronics sold 5,00,000 GSM units last year and an additional 5 million units of CDMA phones.
The Ranjangaon facility, meanwhile, is being expanded by putting in place a second plant which is expected to be completed by September this year. Plans are being firmed up to commence production of microwave ovens and air conditioners out of the facility beginning September, Mr Rao said.
The company might also eventually use the facility to manufacture computer monitors, he added.
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