White goods' exporters plan price hike

KOLKATA: On the heels of the rupee appreciation, white goods’ majors like LG, Samsung, Videocon and Whirlpool have drawn up strategies to beat the heat in the global market. While some have decided to increase prices of their products, others are looking at large volumes to tide over the erosion in export margins.

Samsung, for instance, has decided to hike prices of products meant for export markets by 5-to-10%. “We took the decision last week to increase prices of our televisions and refrigerators being exported to Saarc countries like Bangladesh and Sri Lanka. This is being done to arrest pressure on export margins,” Mr Ravinder Zutshi, deputy managing director of Samsung told ET. Samsung has kept a target to achieve Rs 150 crore export turnover in calendar 2007.

Cetma, which is the apex organisation for consumer electronics and TV makers, feels if the trend continues for long, the industry will miss the projected 15% growth in export turnover this year.

“The consumer electronics industry was expecting a 15% growth in exports in value terms in 2007, over 2006. In 2006, we had earned an export turnover of Rs 2,000 crore. But with rupee appreciating against dollar, the industry may may achieve under 10% growth,” said Mr Suresh Khanna, secretary general, Cetma.

LG Electronics is also treading a cautious path to address the situation. “There is a stiff competition in the global market from countries like Indonesia and China. Accordingly, we are increasing prices. In certain markets we are repositioning products to increase price realisation. Despite this trend, we are aiming to achieve 20% growth in exports this year. Last year, our export turnover was $175 million,” said Mr Jatin Madan, head of exports at LG. The Korean major exports mainly to countries like middle east, Africa and Europe.

Videocon, on the other hand, is looking at higher volumes for achieving export targets. “At Videocon, we plan to export more to achieve double our export turnover in FY08. In this fiscal, we are aiming at Rs 800 crore turnover. A major chunk of our export turnover comes from televisions. We export mainly to Europe and Middle East,” said Mr Venugopal Dhoot, chairman of Videocon Group.

Whirlpool of India is negotiating with overseas buyers on the price front. “We fix price on a quarterly basis. Currently, we are negotiating with our overseas buyers. In calendar 2007, we’ve kept an export target of Rs 220 crore, which a 20% growth over previous year We export our products to middle east, parts of Europe, south east asia, Australia and Russia,” Tamal Kanti Saha, vice-presisdent (sales) of Whirlpool said.