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December 26, 1997


Tandon Computers to set up PC making unit

Tandon Computers (India), an arm of the US-based $700-million Tandon Group, is currently evaluating a few cities, especially Pondicherry and Daman, to set up a manufacturing unit for business desktops and multimedia systems.

This is part of the $5 million that the company plans to pump into operations in the country over the next couple of years. The other half of the investment will go into strengthening the company's marketing, support and market development ventures.

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Tandon Computers is keen on Pondicherry or Daman because of the incentives offered for investing in these places, according to Sumit Sharma, vice-president, operations, Tandon Computers.

"We have to be judicious in investing in infrastructure. Some of the Indian companies that went in for very high technology equipment have experienced difficulty in recent times. The kind of investment we are planning will be appropriate for producing good quality products comparable to the multinational brands available in the market today,'' he claimed.

Initial production will be carried out from a temporary facility established in Bombay, beginning January. When demand volumes reach 7,000-10,000 units per annum, the manufacturing will be shifted to the main factory to be established soon.

The company expects to reach these volumes in 6-12 months. Most of the components will be imported. The hard drives and SMP units will be supplied by the Tandon Group's manufacturing arm in Madras Export Processing Zone.

Tandon Computers is also currently evaluating some Indian OEMs to outsource monitors for the systems.

"Initially we just want to manufacture our volume products - the desktops and multimedia systems. The servers and notebooks will continue to be manufactured in the US. We will focus on the corporate, government and SOHO markets. We expect maximum growth in the business desktop market and in the home segment for multimedia systems,'' said Sharma.

The desktops are expected to be available at very competitive prices. A Pentium MMX, 166 MHz, 2.1 GB hard drive, 512 MB SPB cache and 1.44'' drive with a colour monitor will be street priced at Rs 48,000. This includes Windows 95 and Tandon Almanac software.

On the company's unique selling point, Sharma said, "It is our commitment to our marketplace. We have a good sense of the market and try to bring out the right products with the right configuration to meet customer demands. We also undertake extensive market development activities to build faith in the organisation.''

Tandon Computers has invested in setting up offices in Madras and Delhi to complement their office in Bombay. An office in Calcutta may come some time in the future.

This is in keeping with the company's perception that the market for their products is predominantly in the North, West and South India and not in the East.

The company is also engaged in building up a single-tier dealer channel, which is expected to grow to 100-150 locations by the end of 1998.

Tandon is also trying to extend the dealer network to Tandon Care Centres for support. A technical team trains and qualifies the dealers to act as support centre franchisees also.

Apart from this, back-up support for customers and dealers is available through Tandon's own technical support team.

"We are building a single-tier channel for two reasons. For one, this offers a better margin for the dealers than a channel of distributor, dealer and re-seller would. Two, the customer also benefits by a lower price since there are fewer margins built into the price,'' explained Sharma.

"We are a young company and are keen on investing in the process of organisation building, investing in operations, building software and improving efficiency. We are not in too much of a hurry to build up volumes in our products.

"Because if we invest in building an efficient organisation, volumes will follow. This will also help us to address the needs of the market better,'' he added.

- Compiled from the Indian media

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