Picture Tubes

Only four makers—Samtel, Hotline Teletube & Components, JCT Electronics and BPL Display Devices Ltd (BDDL)—dominate the production of picture tubes in India. Thanks to the growing demand for color TVs in the country, which is set at around 15 percent per year, the production of CRTs is slated to grow by the same percentage. Out of the four makers, Samtel and Hotline have the largest production capacity. The main product trend has been a shift from the conventional CRT to a flat screen, with 21” screens being the dominant seller.



Industry sources estimate that in 2004, around 11.20 million color picture tubes were produced worth $506.50 million and which was 33.5 percent more than the previous year. This year the production of CRTs is estimated to grow 61 percent over 2004 to about 18 million units.



On the other hand, the production of black and white (B&W) picture tubes is shrinking very rapidly. “The demand for B&W picture tubes is not more than one million units per annum,” says Rakesh Baweja, general manager, marketing of BPL Display Devices.



While in 2002, 4.08 million B&W picture tubes were produced, this figure fell to 3.07 million and 2.10 million, respectively in 2003 and 2004. In 2005, the production is expected to fall further to 1.30 million units followed by 0.7 million units in 2006.



The picture tube industry in India has more capacity than demand, says Sushil Gupta, general manager of JCT Electronics. “India’s installed capacity is close to 16 to 18 million units per annum, while demand is around 10 to 10.5 million pieces per annum,” he points out.



Little wonder than that none of the CRT makers are utilizing 100 percent of their production capacity. “The average utilization rate is 60 to 80 percent of the capacity and we are using 65 percent of our capacity,” says Baweja.

Samtel has a capacity of 10.3 million color and B&W tubes per annum with its five production lines. The company makes 14 and 21” color picture tubes. Along with its 21 and 29” True Flat tubes, the company says it produces the widest range of picture tubes in the country and claims to have 38 percent of the market share for CRTs. “We are utilizing around 80 percent of our capacity,” says Sandeep Tandan, consultant, corporate communications at Samtel.











Hotline can produce eight million picture tubes in a year with its five production lines. V.N. Masaldan, managingdirector of Hotline says that although the company is not utilizing its full capacity, it is still investing $228.31 million in a new plant in Malanpur, Madhya Pradesh, which will be operational in June 2006. “Our new plant will add two more million picture tubes per annum and this will give us good market share,” he says.



JCT claims that its capacity is three million units per annum with its two production lines. “From October, we will add another 1.5 million capacity with the addition of one more production line for 14” color picture tubes,” says Gupta. The company currently utilizes around 65 percent of its total capacity.



No new makers are expected to enter this market due to the high capital costs required at startup and the fact that prices of CRTs are dropping rapidly. The production of large size CRTs (34” and above) is zero and these are currently imported. “Large size picture tube production requires a very big investment and these sizes do not have good demand in the Indian market,” points out Masaldan. He says, however, that institutions such as hospitals, video parlors and hotels are the main buyers for TV sets with screen sizes of 34 and 42”.



Some makers are using both locally sourced as well as imported raw materials for the manufacture of their CRTs. “Raw material for picture tubes is more or less available domestically, while most companies get their glass shells from Videocon,” says Tandan. Prices of raw materials are not expected to fall drastically and are not expected to go up either due to the excess capacity. “The prices of tubes are declining as per international trends and they are likely to decline in the immediate future,” he adds.



All four makers export between 30 and 60 percent of their production to Turkey, Indonesia, Poland, Egypt, Russia, and the US among other countries. Over 3.1 million tubes were exported in the financial year 2004-05. “Out of the 3.1 million, we exported 1.74 million tubes in different sizes, while the rest of the tubes were exported by the other three tube manufacturers,” says Samtel’s Tandan.



“Indian products are competitive in both price and quality and exports present a good opportunity for growth to the tubes industry in the country. Moreover, it is becoming increasingly difficult for developed countries to manufacture tubes and compete with products from India and China,” says Yogesh G. Adalatwale, executive-technical, Electronic Industries Association of India (Elcina).



But despite the good quality of their picture tubes, Indian makers tend to find that falling prices in the international market are affecting their export plans. “The price of a 21” CRT which was around $38 last year has now come down to $30,” says Tandan. Also hurting the export prospects of makers is the popularity of LCD, TFT and Plasma Display screens, says Gupta of JCT.