New Delhi: Betting big on the Indian growth story, South Korean consumer durables major LG on Friday said it will invest about a billion dollars here for marketing and research over the next five years.
“We will be investing about Rs5,000 crore in the next five years on R&D and marketing,” LG Electronics India managing director Moon Bum Shin said.
For the past couple of years, the Korean major has been investing around $130 million a year on R&D and marketing. Now, LG has chalked out plans to pump in more money in these areas to push sales and expand research activities.
“Going forward, we are going to increase it (investments) ... to around $200 million every year ... India is the fastest growing market for us and is the focus area,” Shin said, adding that the Indian operations were averaging a growth of 30% annually.
LG’s India chief said that R&D and marketing investment would be apart from what the group would pump in for creating new capacities and expansion to meet the growing market needs.
The company has already invested around Rs1,200 crore in setting up manufacturing plants in India. It has two manufacturing units here, one each in Pune and Noida.
The company is primarily banking on the sale of LCDs and mobile handsets to drive growth in India and is also looking at setting up a production unit for LCDs in the country.
”Currently we are importing LCDs but going forward, in the next five years, we have to look for an option to manufacture LCDs here also. We may start with assembling them here,“ Shin said.
“Our future growth engine would be LCDs and GSM mobile handsets which will attract maximum investment ... We have to put a new production line for front loaded washing machines.”
Asked whether the company is planning to invest more money in manufacturing to make India its export hub, he said, “If we maintain the same pace of growth, what we are enjoying, in the next five years our assumption is that the Pune plant by 2011, will run on full capacity.”
“By 2012, it will face some capacity constraints and we may have to find another location in southern part of the country,” Shin added.
He said the company was working on plans and once the headquarter approves them a feasibility study will be carried out. “Once the plan is approved, we may invest more money in setting up new plant and expanding production line.