Videocon plans expansion of glass shells production

The Rs 4,500 crore Videocon Group is planning to invest Rs 1,000 crore to expand production capacities of glass shells which are used in TV picture tubes in 2005.

The investment will be made through internal accruals.

Videocon Group chairman VN Dhoot said: “The capacity expansion of glass shells from 16 million to 40 million units will take place at two manufacturing plants — the existing Bharuch unit, which is already producing glass shells and the Aurangabad plant where we will implement production of glass shells for the first time. With this move, we aim to become the world’s largest producer of glass shells.” Post-investment, the capacity is expected to be increased by 30%.

The company now plans to foray into Europe, Japan, Korea and Malaysia in order to export glass shells in 2005. Videocon currently exports glass shells to Indonesia and Bangkok. Of the 40 million glass shells, 20 million units will cater to the domestic market. The remaining 20 million will be exported.

This will increase the group’s contribution of glass shells to its overall sales turnover from Rs 700 crore to Rs 3,000 crore by 2006-end, he said. “Videocon has, so far, invested Rs 2,000 crore in the glass shell manufacturing business,” he added.

The move is a part of Videocon Group’s strategy to increase its portfolio and not be recognised only as a consumer durables company. About 75% of Videocon’s business is in petroleum and glass shells. The glass shells business will act as a backbone for the consumer durables industry by supplying glass shells and funnels to television manufacturers, compressors, refrigerators and motors for washing machine,” added Mr Dhoot.

Components business contributes 30% to Videocon Group’s profitability. Prior to the move, we had also invested in backward integration and got into manufacturing of components,” he said.

600450 Videocon plans expansion of glass shells production
Date: 3 January 2005

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