The $14 billion Chinese consumer durables major, Haier Co., Ltd. has firmed up its Indian operations by acquiring the manufacturing facility of Anchor Daewoo Electronics in a few hours from Mumbai in Pune, Maharashtra.
The acquisition, for an undisclosed amount, was announced by Haier India last week.
The acquisition of Anchor Daewoo's facility, spread over 40 acres in Ranjangaon, Pune, will give Haier access to a manufacturing capability of refrigerators, color televisions and washing machines.
According to a Haier official, the company plans to upgrade the new facility, which currently employs around 500 people, and create a research and development facility for its refrigerator range.
The plant has a capacity to make 350,000 refrigerators annually, about 300,000 washing machines and 500,000 colour TVs.
Haier's target is to become one of the prominent players in the Indian market in a few years. We wish to achieve this by following a localization strategy, where R&D, manufacturing and marketing activities are carried out locally, Shi Zhiyuan, managing director, Haier Appliances (India), said.
He added that during the company's presence in India over the last three years, Haier had localized product development and marketing. He added that the acquisitions would also add better quality, faster response time and cost savings.
Haier will make refrigerators for the local market, and later consider exports for the group, the company said.
Haier sees India as a strategically important market and we may expand capacities in the near future and are poised for high speed growth in the coming quarters, Pranay Dhabai, the Chief Operation Officer said.
The setting up of this facility enforces our vision and focus of expanding into premium products. This move will definitely give us an edge over other players in terms of production, he added.
The brand rights for the South Korean electronics brand Daewoo in India would, however, continue to be held by the Mumbai-based Anchor Group and would not be part of the deal.
Daewoo had formed a joint venture with Anchor Group to manufacture and sell Daewoo branded products in India during the 1990s. Subsequently, Anchor bought majority stake in the company in 2004.
However, the Daewoo brand failed to emerge as a significant factor in the local market even as other Korean brands LG and Samsung went on to emerge as the top two players.
Finally, with Daewoo Electronics itself going under the hammer in Korea, the fate of the Indian venture was sealed. According to media reports, Anchor Group was looking for buyers and negotiations between Haier and Anchor for the transfer of the Pune plant had been taking place.