Delta baulks at building India plant

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Delta Electronics (Thailand) Plc may delay the construction of a new plant in India due to the sluggish market, as the company expects Indian revenue to be flat at US$ 100 million this year after five years of contraction, reports the Bangkok Post.

Anusorn Muttaraid, executive director, Delta Electronics (Thailand) Plc said, “Thailand’s biggest electronics firm will wait and see how the Indian market performs this quarter and next before deciding whether to proceed with the new plant in Chennai. It would be the company’s fourth factory in India.”

The facility was originally scheduled to open this year at an estimated investment cost of 500 million baht for assembly of products such as uninterrupted power supplies.

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“Indian companies have cut spending, due partly to the economic situation in Europe,” said Anusorn. “We’ll probably decide in the fourth quarter whether to invest in the new plant.”

India’s industry minister is scheduled to visit Delta’s plant in Tambon Bang Pu of Samut Prakan province, where management will propose how India can simplify regulations. At present, India has decentralised its decision making processes, resulting in time-consuming approval and high costs for investors, said Anusorn.

Henry Shieh, Delta’s president, said the company expects revenue generated in Indian to be similar to last year at US$ 100-110 million. Though Delta has dominated the telecom power system market there with a 40 per cent share, sales have continuously edged down from a peak of US$ 125 million in 2007.

“New investment in factories in India for the time being is not as strong as in the past,” said Shieh. “Hopefully, a turnaround should be expected from next year onward.”

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