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HindustanTimes Tue,16 Sep 2014

'Mexican unit gateway to US market'

Arun Kumar, PTI   July 22, 2005
First Published: 15:20 IST(15/7/2005) | Last Updated: 01:41 IST(22/7/2005)

Videocon is on an acquisition spree on the global canvas, but it is losing sight of its market share on the domestic turf. What is your strategy to counter the onslaught of Korean giants in the domestic market?
The group is not at all losing sight of its domestic market share. It still continues to have a dominant position in various product categories. With the addition of brands to the basket, the group is confident of further consolidating its position even in the domestic market. As regards countering the Koreans, the group believes that with the launch of a world-class product range strongly supported by the new tieups and acquisition of R&D facilities would be the most important weapons in the hands of the group.

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The alliance with AB Electrolux gives you the opportunity to become one of the largest original equipment manufacturers in the consumer durables industry. Is it going to be your thrust area? Are you going to become an OEM for other global giants in the same space?
Yes, of course.

Is it part of your strategy to transform silently into an OEM from a leading consumer durables company or is it a fait accompli for home-grown entrepreneurs?
The group would strive to continue as the leading consumer durable company of India, but at the same time, in the global scenario it aims to be the largest OEM.

You have also stated that you will promote the Elextrolux and Kelvinator brands in India and would spend around Rs. 100 crore on advertising. What is your strategy for the mother brand of the group — Videocon? How much are you going to spend to promote this?
The past experience regarding the 'flanking policy' has been that additions of brands and the group's efforts to strengthen these brands have resulted in further consolidation of the mother brand. The group believes that handling of the internationally reputed brands, both in the domestic and international market, would certainly be beneficial for the mother brand.

Through these two acquisitions, Thomson and Electrolux, Videocon will become a strong player in the European market, what is your strategy for the US market?
One of the facilities acquired from Thomson is located in Mexico. The group looks at it as the gateway to the United States market.

Are you also looking at listing your overseas acquisition in the US market?There are no such plans as of now.

In the oil and gas space, you have signed an MoU for furthering interests in Sudan and Jordan. What is the plan in these two countries? How much investment is required?
All this is at a preliminary stage. No final estimates have yet been made. However, the group expects an amount of about US $175 million as the initial estimates.

The Ravva field gives you cash accruals of Rs. 400 crore annually. Will you leverage this investment in these two countries?
The investments in these two countries would be financed on a standalone basis, However, a part of the existing accruals may be utilised initially towards these projects.


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