The Telegraph
Since 1st March, 1999
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LG to invest Rs 50 cr in third AC plant

Calcutta, Sept. 25: LG Electronics India, the wholly owned subsidiary of the LG group of Korea, has decided to set up yet another air conditioning plant either in the northern or in the western region of the country.

The new plant, which will be the company’s third after its Noida and Guwahati plants, will have a manufacturing capacity of one lakh units in a year.

Confirming the move, Salil Kapoor, product group head (air-conditioner division) said the company will invest around Rs 50 crore to set up the new plant.

“The decision on the location and investment size will be decided in the next eight to 10 days. The new plant should come up by December this year,” he said.

Kapoor also pointed out that the company plans to sell at least three lakh air-conditioners in the next financial year. “If the current growth pattern is any indication, we will definitely sell three lakh units next year. And this is the reason why we need another plant before the next financial year begins,” he said.

The company’s capacity after the Guwahati plant has been commissioned in February this year stands at two lakh units a year. While the Noida plant has a capacity of 1.5 lakh units, the Guwahati plant has a capacity of manufacturing 50,000 units.

LG, which is the market leader with a 37 per cent share of air-conditioners, has recorded a sale of 1.6 lakh units till August compared with one lakh units in the last calendar year. “We have revised our target upwards from 1.8 lakh units to 2 lakh units for the current year’s sales,” he said.

The air-conditioner division is set to contribute around Rs 400 crore to the company’s projected sales of Rs 3,000 crore in the current year. The company has also taken measures to earn at least Rs 60-70 crore from exports in the neighbouring countries, he said.

The company is also focusing on corporate sales with an aggressive marketing strategy supported by niche brands like Whisen. It is also setting up service franchisees to serve corporate customers better.

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