The Financial Express [FRONT PAGE][ECONOMY]

Monday, December 15 1997

Orissa puts Konark TV on the block

Tina Edwin

NEW DELHI, December 14: The slow growth in the consumer electronics market coupled with cut-throat competition following the entry of multinational brands has taken its toll on yet another television company. The Orissa government has put its wholly owned television company, Konark Television Ltd, on the block. The company, which at one time was a top player in the black and white televisions market, now has accumulated losses estimated at Rs 25-30 crore. Sources said that the state government has decided to sell the television unit to one of the multinational companies.

Konark has two manufacturing facilities situated at Mancheswar and Rasulagarh industrial estates of Bhubaneswar with an installed capacity to manufacture 60,000 black and white televisions and 40,000 colour TV sets. According to industry sources, the company has stopped production of colour televisions altogether, and at present, it manufactures only black and white sets. According to some unconfirmed information, the company had stopped production of black and white sets for some time.

The state government has been scouting for a partner for over a year without success. It has now put out advertisements in a leading newspaper, inviting private participation.

Sources further said that in an effort to help out the company, a top bureaucrat in Delhi had sounded out two South Korean companies - Samsung India Electronics and Daewoo Electronics - during the last one year on the prospects of entering into a partnership with Konark. However, none of these companies were interested as they had no plans to enter the markets in east India. Besides, Samsung was in the process of setting up a facility at that stage. Industry sources felt that the Konark's facility is in fairly good working condition, though some investment would be required to modernise it. Sources further felt that the state government's effort to bail out the ailing company may come a cropper considering that there already exists excess capacity in the market. At present, the 29-inch colour televisions and the under-Rs 10,000 per set segments of the market are the only categories showing growth. Besides, the margins are very thin in the market for black and white TVs.

Konark is not the only state government-owned television company that is beset with financial problems.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.

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