Samsung has merged its consumer electronics and telecom (read mobile phone) businesses in India. Accordingly, Samsung Telecommunications India is being merged into Samsung India Electronics.
Both Samsung Telecom India and Samsung India Electronics are wholly owned subsidiaries of Korean parent, Samsung Electronics Co. Samsung expects to gain significant operational and production synergies along with cost-savings through the merger.
Post-merger, Samsung India Electronics will have three business divisions — consumer electronics, IT and telecoms. The company has recently received Delhi High Court approval for the merger. The move will also help Samsung consolidate its market-share in key segments since the merger will allow it to cross-sell products.
Samsung Electronics director (South West Asia HQ) W T Yang said: “The merger of the two subsidiaries in India is significant as it will help gain operational efficiencies and leverage synergy across both the businesses.”
“The consumer electronics and telecom business divisions will leverage the synergy in terms of management, business processes, manpower, production facilities and even in terms of vendors. Going forward, we are also look at tapping synergy by way of our channel, especially the brand stores,” Yang added.
The consumer electronics division is headed by R Zutshi, deputy MD of Samsung Electronics India. Sunil Dutt is country head for Samsung's cellular mobile business while Ranjit Singh Yadav heads Samsung's IT business. Post-merger, all business heads will report to Samsung India Electronics managing director SH Oh.
Last year, the combined sales turnover of the three divisions (2007) was $1.3 billion, which the company plans to grow by 30% this year. Samsung India Electronics' scope of operations include sales & marketing, manufacturing and R&D in India.
While the manufacturing facilities for mobile phones and consumer electronic products are located at Noida, the company's second manufacturing facility in Chennai produces TV and washing machine. Samsung has two software development centers at Noida for development of software pertaining to digital media products and mobile phones.
The company has beefed up its organisation this year by increasing the number of branch offices for consumer electronics business from 20 to 50. It has also undertaken strategic recruitment of senior professionals for both consumer electronics and mobile phone divisions. The hirings include areas like market intelligence, strategic channel management, national sales and product management amongst others.
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