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Hitachi, Panasonic to make India base to access Africa, Middle East; plan Rs 5,700-crore investments
KOLKATA: Hitachi and Panasonic, Japan's two biggest corporations, plan to invest more than Rs 5,700 crore in India as they have identified the country as one of their biggest bets for growth and a base to expand in Africa and Middle East markets.
Hitachi, which held its first board of directors meeting outside Japan in its 102-year history in New Delhi on Thursday, announced Rs 4,700-crore expansion plans that include building 5 manufacturing plants.
Japan's largest industrial power and electronics conglomerate has formulated a 'India business strategy 2015' plan to make the country one of its top markets and targets a three-fold jump in its India revenues to Rs 20,000 crore by 2015-16.
"With its market, human resources and business partnerships, India is an important strategic base for Hitachi," its global president Hiroaki Nakanishi said.
Panasonic too has lined up more than Rs 1,000 crore investment in a new plant at Haryana and targets Rs 20,000-crore revenues by 2014-15, a year earlier than Hitachi.
Yorihisa Shiokawa, Panasonic's managing executive officer and chief of the Asia Pacific, Middle East and African operations, said the firm wants to set up more such plants and become the country's largest appliances maker by 2018.
"Localisation will be the key for Panasonic's growth in India and the main objective has been that the products...should be specially conceptualised and customised for the Indian consumers, keeping the local needs in mind," Shiokawa said.
The development is in line with Japanese electronic companies' increasing dependence on India as one of their highest growth-potential markets at a time when sales in the US and Europe are slowing.
In end-August, Sony Corp President and CEO Kazuo Hirai came to India within months of taking charge and announced plans to increase investment in the market and expand sales by more than 30% from last year's $1.1-billion revenue (Rs 5,500 crore) to make India its fifth largest market.
Both Hitachi and Panasonic said they will make India their base to expand their business in Africa and the Middle East. Hitachi on Thursday named Hitachi India as its regional headquarters, making India a separate management area outside Japan . The other such areas are China, Southeast Asia, Europe, and the Americas.
Hitachi has a wide range of businesses interest in India, including power and industrial systems, components and equipment, air conditioning and television. It recorded Rs 6,700 crore revenue last fiscal. Both Hitachi and Panasonic said they will pursue growth in India by localising development and production of their businesses and products, and focus on developing Indian talent.
Hitachi plans to double the number of its employees in India to 13,000 by 2015, while Panasonic plans to add 3,500 more to its over 12,500 people on the rolls.
Panasonic's Shiokawa said the company is committed to be an Indian company here
instead of being a Japanese company operating in India. He said the company plans to enter into several new product categories such as health, energy-related products and LED lights in India.Panasonic's big plans for India comes at a time when globally it looks at selling or shutting down several of its factories and assets. The company is staring at a second consecutive year of record loss, with a forecast of around $9.4 billion (Rs 51,200 crore) net loss for the year ending March 2013.
Credit rating agency Moody's last month cut Panasonic's long-term credit rating to one level above junk. Shiokawa, however, said the company is committed with its investment in India. "India has been one of the most important countries and potential growth market for Panasonic.
The Indian operations has potential to be ranked amongst the top in the Asia Pacific region in terms of revenue contribution," he said. Panasonic India last year clocked . 5,500-crore sales and targets to almost double it to Rs 10,000 crore this fiscal.
Hitachi, Panasonic to make India base to access Africa, Middle East; plan Rs 5,700-crore investments - The Times of India
