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LG ready to cash in on Bengal deal

Calcutta, Oct. 8: LG Electronics India will assemble colour televisions (CTVs) in Bengal through its manufacturing sub-contract with state-owned agency Webel. The production is expected to commence by November.

“In 2004, we expect to assemble between 60,000 and 1 lakh CTVs,” company managing director Kwang Ro-Kim said. “Initially, the unit will cater to the demand in the state and later supply to the eastern and north-eastern states.”

Bengal has been a high-growth area for LG. In January-September, the company has recorded sales of Rs 170 crore. The company plans to achieve a turnover of Rs 297 crore in 2003 from the state against Rs 177.4 crore in 2002.

LG has a 20 per cent market share in CTVs, 43 per cent in airconditioners, 22 per cent in washing machines, 17 per cent in direct cool refrigerators, 35 per cent in frost-free refrigerators and 36 per cent in microwave ovens in the state.

The company’s second manufacturing unit in Pune is expected to be completed by August 2004. The Rs 250 crore plant will initially manufacture CTVs and refrigerators.

“We expect to move to a dominant position in 2004. LG has already clocked a turnover of Rs 3,100 crore in January-September, which is a 53 per cent growth over Rs 2,100 crore achieved in the corresponding period last year,” said Kim.

LG has set a turnover target of Rs 4,500 crore for the year ending December 2003, which is a 40 per cent growth over Rs 3,315 crore achieved last year. Exports are expected to increase from $20 million last year to $75 million this year.

“We will see a 25-30 per cent growth in every category,” Kim added. The company will expand its distributor network and focus on district marketing to expand the reach in rural markets.

CTVs contribute about 50 per cent of the firm’s total revenues. “We have a 18.2 per cent market share in CTVs and 23.1 per cent in the flat segment. We expect to sell 2 million CTVs next year,” said Kim.

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