Do you know that Samsung has a TV production factory in Chennai having a capacity of nearly 3 lakh units per year. But, now Samsung is planning to stop its production facility and choose Vietnam for importing its units.
The units imported from Vietnam, those can be assembled in India and hence there is no need for full fledged production unit in India. This can be a big setback for the Make in India vision as most of the jobs would be slashed. Samsung has even given the hints of shutting down to the local vendors and also the entire facility would be closed down.
This news comes barely two months after Samsung launched their biggest ever mobile manufacturing unit in Noida, Uttar Pradesh. Spread over 35 acres, this single unit will generate 35,000 jobs as 120 million units of smart phones will be produced from this facility.
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The same facility started manufacturing the TV units in 1997 which was then converted into the smart phone factory and the TV manufacturing was then transferred to Chennai. according to the reports, the Samsung was supposedly start the manufacturing of refrigerators and the flat panel televisions along with the smart phones at the new manufacturing unit in Noida, which has received nearly Rs. 4300 crores as an investment.
Reacting on this news, a spokesperson for Samsung said, “Samsung remains deeply committed to India. As regards to your query, no decision has been taken so far.”
Reasons for Samsung’s close down
The most important reason is high import duty on some key manufacturing components of TV, which the Govt. of India has announced in the month of April. Other reasons include, the import duty was then hiked for the “Open Cell” that is considered to be the important component for the TV panels manufacturing.
If the Samsung happens to import these expensive components, and then manufacture their TVs in India, their profitability reduces thereby making the whole program meaningless. The import duty was hiked by the government to encourage the local production of the electronic gadgets but seems to be backfired in case of Samsung. It was earlier 10% import duty for Open Cell, which has been reduced to 5%, but still, seems high for companies like Samsung.
Why Vietnam?
As Vietnam is the strongest manufacturing hubs of Samsung even matching the mighty China.
In 2016-17, goods manufactured at Vietnam by Samsung was worth $50 billion of exports, compared to $8 billion of goods manufactured in India, which were exported.
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