The Rs 6,000 crore (Rs 60 billion) Videocon group is planning to set up a compressor line in China. Pradeep N Dhoot, president of Videocon International, said $30 million will be invested in the project.
"Videocon is planning to set up a compressor manufacturing facility in China with a local company as a joint venture partner. The total investment will not be less than $ 30 million," Dhoot said.
The move is part of a strategy by the group to relocate its compressor manufacturing business acquired in Italy. Videocon had recently bought out its Italian partner in Necchi Corporation, which has capacity of 8 million units per annum.
Dhoot said company will relocate majority of Necchi's facility to China and India. He informed 2.5 million capacity has already been shifted to Bangalore.
"It is yet to be decided what will be the capacity of the Chinese unit. We are going to keep a line for one million compressors in Italy. The rest will be shifted to China and India. The process has already started. We hope to complete the entire exercise within a year and half," he informed.
The Italian facility will have only the high-end compressor line, used for commercial refrigeration, and only serve the European market.
Dhoot informed Videocon will not venture into forward integration and manufacture refrigerator in China. The facility there will only cater to Europe. Back home, Videocon will use its facility to cater to the domestic and Middle East markets.
The group, which has diversified interests in petroleum, power, entertainment, online lottery as well as in consumer electronics, already has a internet-enabled TV manufacturing unit in China.
Videocon is one of the large player in home appliances even though company's bulk of the revenue comes from CTV business.
Of late, the company has been revamping its refrigerator business and is now focusing on water dispensing models to tap the domestic market.
