Chinese white goods maker Haier will invest U.S. $200 million in India during the next 4 years to set up an integrated manufacturing facility, a factory exclusively to manufacture refrigerators and that will also be used as a research and development center.
The appliance company says it plans to be among the top three white goods companies in India in the next 5 to 7 years.
"The R&D center will be set up 2 years from now, the integrated manufacturing facility will be set up in 3 years and the refrigerator manufacturing facility in the fourth year," said T.K. Banerjee, chairman and managing director of Haier India, the Chinese company's Indian subsidiary.
Haier launched its range of home appliances and consumer electronics products in north India in January 2004. Recently, it launched its range in Gujarat and plans to cover the whole country in the next 2 to 3 months.
"We will first build the brand," Mr. Banerjee said. "We will continue to import high-end products, but source low-end products from local manufacturers in the first couple of years."
He said that in the next 5 years, the white goods market in India will be worth $5 billion, and Haier aims to garner $1 billion of that.
"India will emerge as one of the key markets for the group down the line and sales here will constitute 7 to 10 percent of our global sales," he said.
Mr. Banerjee said several state governments were in talks with the company for setting up the three facilities, but locations have not been finalized as yet.
"Gujarat and Maharashtra are definitely ahead of others, but it is not necessary that all the three facilities will be in one state," Mr. Banerjee said.
On the pricing of products, he said Haier would not involve itself in any price war. "Our positioning will be of best products at affordable prices. For example, the refrigerator range will begin at Rs 8,000 (approx. U.S. $181) for a 180-L model, and the price will go beyond Rs 100,000 ($2,267) for the high-end model."
The company has also for the first time introduced bottom-mounted refrigerators, which have the freezer compartment at the bottom. The model will cost Rs 29,000 ($657). In addition, it says its new "double-drive" washing machine will reduce the time taken to complete the clothes washing cycle by one-half.
Mr. Banerjee said the company's dealer and distributor network, which currently stands at 450, will be increased to 2,000 this year and doubled next year. (Reuters)
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