NEW DELHI: Samsung India will invest Rs 1,970 crore in doubling the manufacturing capacity of its Noida plant from where it plans to export mobile phones and white goods. HC Hong, president of Samsung India, said in a statement on Monday that the handset market leader has received the Uttar Pradesh government’s approval to invest in the state and expand its manufacturing base in the country.
The investment announced will be made by the end of 2019. “A bigger and more robust manufacturing facility will help us address the needs and demands of our growing customer base across the country and the region,” Hong said.
According to Google, smartphone penetration in India will continue to rise — from 300 million users in 2016 to 500 million users by 2020 — underlining the potential of the telecom market, which had nearly 920 million mobile phone subscribers as of July. The rest of the telecom market comprises feature or basic phone users, who are gradually migrating to smartphones. Despite the potential, Samsung also faces huge competition in the Indian smartphone market where Chinese players have been raising the marketing decibel while investing strategically towards manufacturing in India.
The Rs 1,970-crore expansion plan comes at a time the company is grappling with the global and local fallout of the Galaxy Note 7 debacle, which culminated in the company killing the product. In India, Samsung did not begin sales of the Note 7, but analysts have estimated a sharp hit to revenue for 2016 from lost sales, which the company has vehemently denied. The latest expansion plans though underline India’s criticality to Samsung.
“With the large capacity, we will be able to do exports, but in a phased manner,” a senior executive said, without outlining a time frame for starting exports. The company has over 40,000 employees in India, and employs 4,000 people at the Noida plant.
Source: Economic Times