Samsung India Electronics Ltd on Tuesday announced its plans to set up a refrigerator manufacturing facility in the country at a cost of $25 million.
The plant, which will have an installed capacity of 500,000 units per annum, will go into production from August next year.
It will help the company to increase its volume sales for the next year from 2,00,000 units to 4,00,000 units, Ravinder Zutshi, vice-president (sales), said.
Local manufacturing will also help the company derive cost benefits, which will help it price its products competitively vis-a-vis competition, Zutshi added, without disclosing if the market can expect a price cut.
He, however, clarified that 50 per cent of the company's refrigerator units would continue to be sourced from local original equipment manufacturers such as Voltas.
About 70 per cent of the refrigerators rolling out of the new unit will be conventional direct-cool products, which means there is a clear shift towards manufacturing of frost free units, which comprised around 15-20 per cent of the overall market.
Samsung's competitor and compatriot LG Electronics has also set up a refrigerator plant for frost-free units and it is expected to announce investment for a direct cool refrigerator plant sometime next week.
However, unlike LG, which is also setting up a compressor manufacturing facility, Samsung has no such immediate plans.
"We will import Samsung compressors from our overseas factories," M B Lee, vice-president, marketing, said.
Samsung already has production facilities for colour televisions (1 million sets per annum), washing machines (300,000 units per annum), air-conditioners (100,000 per annum) and microwave ovens (100,000 units per annum). All these manufacturing lines are housed in an integrated plant in Noida near Delhi.
The new refrigerator plant will be its fifth in the world, after Korea, China, Mexico and Thailand. Zutshi said the plant will cater only to the domestic market.
But executives added plans are being drawn up to find export markets for India-made refrigerators.