The growing demand for consumer durables and the entry of multiple players in retailing have led Samsung Electronics to focus on the home appliances sector and tap opportunities in durable retailing.
The Korean giant is investing $100 million (Rs 442.5crore) to set up additional capacity and plans to introduce new products in the home appliances sector.
To tap the growing demand for air conditioners and washing machines for the next three years, Samsung Electronics is building a plant at Chennai, which is expected to be operational by August 2007.
A company spokesperson said, "Though the penetration of refrigerators and washing machines is comparatively low, there is a huge growth potential as the market is upgrading towards innovative products. The company would be investing $70 million (Rs 309.7 crore) till 2009 to set up capacities for consumer durables and home appliances and the remaining $30 million (Rs 132.7 crore ) would be invested by 2011."
Currently the company's Noida plant has the capacity to manufacture 8 lakh refrigerators and 5 lakh washing machines and air conditioners . The company expects about 20 percent growth in the home appliances sector and plans to launch a series of new products in 2007.
It would be introducing a new lineup of air conditioners, star rated frost free refrigerators and four new models of semi-automatic washing machines in the first quarter of 2007.
Recently Samsung appointed S H Park, as managing director, who is expected to give a fresh thrust to the home appliances sector.
Samsung Electronics will soon appoint a separate team to look after the changing durable retailing in India. The company aims to capture the opportunity to retail its products through the large format retail chains been established in the country.
"There is a big growth potential in the large format retail chains and the company would work on customising product displays as per the individual retailer's preference," said Samsung's spokesperson.
However, the company maintained that it will retail products under its own brand name and is not looking at manufacturing products for other retailers.
Samsung is also in the process of strengthening its own retail network. The company intends to scale the current number of 95 stores by opening additional 30 stores in 2007.
