India is emerging as a major alternative export hub for Samsung Electronics, South Korea's largest electronics manufacturer, for colour TVs, home appliances and mobile handsets, as a result of possible export restrictions on China by Europe and the US. China is currently Samsung's largest export hub with six manufacturing units.
A new 80-acre plant is being set up near the company's present plant in Chennai, 30 acres of which will be in a special economic zone (SEZ), at an investment of $100 million. Initial annual capacities include 1.5 million colour TV sets, 2,00,000 LCD TVs, and 3,00,000 LCD monitors and an undisclosed home appliances capacity. Samsung has also set up a new plant at Manesar near Delhi to initially manufacture 1.5 million phones annually.
The hubs will feed Europe, US and the Gulf. "Countries like the US and Europe could have quotas for exports from China, so India is surely an attractive country that can provide products to these markets," said Hyun Bong Lee, president and CEO of Samsung Electronics, South West Asia.
Lee said the main issue currently is to get international quality material supplies and the company is already working with Indian vendors in this connection.
"For instance, we need international quality steel, and our policy is to develop local vendors rather than getting them from Korea."
Six Indian vendors that manufacture products like plastics and moulds for Samsung's existing plant at Noida are also setting up manufacturing bases in Chennai. The existing plant has an annual capacity of over 1.5 million TV sets, 0.8 million refrigerators and over half a million home appliances.
For Samsung, creating export hubs is a part of its global strategy. For instance, it has set up small hubs in Mexico that supply products to the US market or a plant in Thailand that caters to the South-East Asian market. Its plant in Hungary exports to western Europe.