After the success of chaebols such as Hyundai, Samsung and LG in India, Korean electrical manufacturers are now looking to set up manufacturing base in the country.
Electrical and heavy engineering companies such as Hyundai Heavy Industries, Hyosung, LS Group (formerly a part of LG) and Doosan Heavy Industries are considering making India their manufacturing hub.
The aim: to export electrical equipment such as transformers, gas insulated switch gears, and circuit breakers to the Middle East.
The plan is to tie up with a local manufacturer to make equipment meant for exports to the Gulf, or set up a wholly owned subsidiary in India. Right now, Korean electrical exports to the Middle East are negligible, because of the large distance covered.
A base in India would pare transportation time by a third- a significant competitive advantage.
"The idea still is at a nascent stage. Korean companies will discuss the possibility of making India a hub for exports with industry officials. If all goes well, some development should take place within the next one year," said Joon Chull Kim, chairman of Korean Electrical Manufacturers Association.
"India would be an easy gateway to Gulf and other neighbouring markets. Secondly, Korean companies would be able to manufacture quality equipment in India at cheaper costs. And out bases would also enable to tap into domestic markets with innovative products," he said.
The Middle East electrical equipment market is valued at Rs 6,700 crore ($1.5 billion), comprising of Saudi Arabia, Bahrain, UAE, Qatar, Kuwait, Oman and Iran. Including Iraq, the market would easily cross Rs 10,000 crore (Rs 100 billion) said industry sources.
A 16-member Koema delegation was in Mumbai on Wednesday. The delegation had arrived to meet the Indian Electrical and Electronics Manufacturers Association officials to discuss trade opportunities between the two nations in electrical trade.
Hyosung is one of the largest electrical companies in Korea, cornering about 50 per cent of transformer and 70 per cent of circuit breaker market in that country.
LS Industrial Systems and LS Cables are leading companies in their respective fields and were part of the well-known LG Group, until last year. Doosan is the one of the leading manufacturers in the field of heavy engineering.
A new design
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Korean firms plan to export electrical equipment such as transformers, gas insulated switch gears, and circuit breakers to the Middle East from the country
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The plan is to either tie up with a local manufacturer or set up a wholly owned subsidiary in the country
