Targus to outsource local manufacturing in India

Laptop accessory provider, Targus India, is planning to manufacture its products
in the country within 12 months. But rather than have its own manufacturing facility, it will outsource this to a local partner. Targus is setting up a
local manufacturing unit, as the import taxes are very high, which results in increasing the prices of its products. 

The company will also introduce it range of budget products, called Tech Zone,
for the Indian market. "We know that customers in India are price-conscious and therefore this range will meet their requirements," said Mathias Von
Bescherer, MD-APac, Targus Asia Pacific.

The price differential between Targus' regular range and that of Tech Zone products will be around 30%. These will come with a warranty of one-year, as
against the lifetime warranty offered for Targus products. 

Besides laptop accessories, Targus has expanded its product portfolio to include
accessories for PDAs, cell phones, iPod and digicams. All these products will be made available in India though carry cases contribute almost 75% of its
revenues nationally.

Currently, Bangalore-based Nest Systems is the disty for Targus. Tech Pacific
India Ltd was the company's national erstwhile distributor from 2003 to 2004.

But it had discontinued this relationship as it felt that the disty was not geared to propel the business of push-products like laptop accessories. Said P
Sukumaran, GM-India, Targus India, "We have learnt from our past experience and now that Tech Pac has merged with Ingram Micro, we will go to it with a
different strategy to push our products."

Incidentally, Targus has a global contract, wherein it works with Ingram Micro
in countries, where the latter has its presence. But Sukumaran feels that the disty is still a box mover, which provides good fulfillment of needs. "However,
it can't generate business for products like ours. We will therefore continue our alliance with Nest, we as are still a relatively small company and one
national distributor is adequate for us," he added. The company has not ruled out plans to have regional distys in the North and East, though.

Targus is currently working with 30 partners in the country and will soon roll
out a recognition and incentive module for them, which it has labeled as Channel Health program. It also plans to set up Targus Boutiques, a chain of
retail outlets, operating through franchisees. 

It has opened an Indian office two months ago and hopes to increase its workforce steadily over the next two years. It does 80% of its business by
supplying to OEMS, while the balance comes from its channel. It has come out with a dedicated product line for people in different countries of Asia,
including India. This is not surprising considering that APac contributes 10% to its global revenues. And its business in this region is growing at a rate of
40% YOY. The vendor offers lifetime support for most of its products at over 145 countries.

VINITA BHATIA

MUMBAI