TCL sets up JV to make IT products

MUMBAI: TCL, China’s third largest electronic manufacturer, has entered into a technical joint venture with Pune-based real estate and automobile firm DS Kulkarni (DSK) Group to manufacture and market information technology and digital products in the Indian market.

DSK Group has made its IT foray through newly floated 100% subsidiary DSK Worldman Computers. "The JV marks our foray into the IT and related business. We have made initial investments of Rs 25 crore for the necessary, up an assembly unit, establishing distribution and sales network across India and for procuring the required inventories," DSK Group chairman and managing director DS Kulkarni told ET.

“It may be the first time that a Chinese electronic goods maker has tied up an Indian company to manufacture its products in India,” he added.

According to TCL’s website, its PC business accounted for nearly 5% of the group’s total revenue in 2006. This business reported revenues of HK$1,568 million in 2006. Till 2006, TCL’s PC business was handled by TCL Multimedia Technologies. In 2006, the group hived it off to TCL Corporation.

Although the tie-up is mainly a technical one, the revenues from the JV would eventually also accrue to TCL as the market presence spreads, said DSK Worldman Computers executive director and CEO Milind Kshirsagar. "Initially , TCL would be providing us with the technical knowledge and going ahead TCL would also earn a percentage out of the total turnover," he said.

The company has already established its sales network by starting regional offices and appointing distributors in the cities like New Delhi, Kolkata, Mumbai, Ahmedabad, Nagpur, Aurangabad, Hyderabad, Bangalore and Chennai. The sales target set for the first year of operations is 40,000 units. The company says that it aims to be among the top four PC brands in India by the next year end.

According to Gartner, the revenues from Indian electronics equipment production are expected grow at 15.7% CAGR to $28.7 billion by 2011 while India’s imports of electronic equipment were worth $15.3 billion in 2006. TV and audio systems constituted 39% of the total production value in India.