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Chennai plant will supply Slovakia unit
PHUSADEE ARUNMAS
Driven by strong demand for electronic products in India, Delta Electronics (Thailand) Plc, the country's biggest listed electronics business, is poised to beef up its expansion in India, planing to invest about $50 million next year.
''We've already invested about 300 million baht in India and are preparing to allocate $50 million more to set up a new plant in Chennai,'' said Anusorn Muttaraid, the company's executive director.
Delta Electronics is one of a few Thai corporations that have pioneered investment in India.
''India is a very promising market and its tax incentives are very attractive. Our investments are granted a tax holiday for five years and a 50% tax cut for another five years,'' said Mr Anusorn.
''On top of that, India allows 100% foreign ownership and tax waivers are also available for imported machinery if the plants are located in industrial estates.''
Another advantage is relatively low labour cost. The monthly wage of non-skilled labour is just 1,800 to 2,000 baht.
Delta Electronics founded the wholly owned subsidiary Delta Energy Systems (India) in late 1996 in Gurgaon in Haryana state to assemble, market and sell power systems.
It later set up Delta Power Solutions India Private Ltd in 2007 to assemble, market and sell telecom power systems, uninterrupted power supply (UPS) units and other products.
Delta Power Solutions now operates two plants, one in Rudrapur in Uttarakhand state in northern India, making telecom power supplies and UP units, the other in Pondicherry in Tamil Nadu state, making telecom power supplies and magnetic components.
The Pondicherry plant is due to start commercial production on Aug 28 with output destined mainly for China. According to Mr Anusorn, the company is in talks with the central government to look for a site in Chennai to make low-end electronic components to supply the group's production base in Slovakia.
Last year's sales in the Indian market were outstanding, more than doubling to $96 million, said Mr Anusorn.
Sales are expected to top $150 million at the end of this year, about $2-5 million from exports.
Delta Electronics has set an ambitious target to raise its sales in India to top $1 billion over the next seven years.
The electronics market in India, one of the world's fastest growing economies, is vast since most products related to electronic components still need high-technology parts.
Delta Electronics reported total sales of 33.76 billion baht last year, a decrease from 43.55 billion baht a year earlier partially because of an appreciating baht against the US dollar. But its profits jumped from 1.96 billion baht in 2006 to 3.15 billion in 2007.
The company expected its sales would increase by at least 20% this year.
Delta shares closed on Friday on the SET at 20.70 baht, down 20 satang, in trade worth 1.87 million baht.
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