HYDERABAD: Ramesh Taniwala, chief operating officer, Samsonite India, told reporters here that the second plant with an investment of $15 million was more likely to come up at the port city of Visakhapatnam in Andhra Pradesh. This facility would be part of the company's restructuring plan and a new strategy to obtain overall leadership in travel goods segment. He said the second plant, likely to come up in a year, would manufacture half a million pieces a year. The existing plant at Nasik, which produces 620,000 pieces, will also enhance production to its full capacity of half a million pieces a year. The Nasik plant was set up in 1998 with an investment of $25 million. Under the new plan, India will account for half of Samsonite Corporation's global production of 2.5 million pieces annually. The company sells another eight million pieces designed and developed by it worldwide. He said while the Belgium facility would continue to focus on design, development and manufacturing of polypropylene products, the facilities in India would concentrate on the complex and high-end products. The company is looking towards India mainly due to the availability of skilled manpower and large production of petrochemicals here. Samsonite, which has a market share of 34 percent in the luggage industry in India, sells only eight percent of its manufactured goods from its Nasik facility for the domestic market and exports the rest. The proposed plant will also have its main focus on exports. Samsonite, which has global sales of $960 million, has a turnover of 800 million in India. The size of the Indian luggage market is "miniscule" at 4 billion but the company believes it would grow. Under the medium term restructuring plan, the company will shut down 19 of 23 manufacturing centres. The company will continue to have its four manufacturing facilities in Belgium, India, France and China. E.P. Suresh Menon, executive director (sales and marketing), explained that the cost of manufacturing had gone up in several countries, especially in Europe, and many companies had moved out their production facilities. Under the new distribution strategy in India, Samsonite plans to penetrate smaller towns. The company has 1,400 retail outlets worldwide, and 115 of them are in India.
Source: IANS