Strike Disrupts Samsung Plant in India Amid Wage Demands

Operations at Samsung's plant in southern India were halted for a second day due to a strike by hundreds of employees demanding higher wages. The strike affects 20% to 30% of annual revenue from the plant, which produces consumer electronics. The labor action comes just before India's festive season, potentially impacting sales.

Operations at Samsung Electronics' plant in southern India were disrupted for a second day on Tuesday as hundreds of employees continued their strike for higher wages. This marks a rare episode of labor unrest for the South Korean company in India.

India's largest consumer electronics firm, Samsung counts the South Asian nation as a key growth market. Competing with giants like LG Electronics, the company manufactures various electronics, including televisions and refrigerators, in the region. Despite being the smaller of its two Indian factories, the strike-hit plant contributes 20% to 30% of Samsung's $12 billion annual revenue in the country, according to anonymous sources familiar with the matter.

Posters reading 'Indefinite Strike' were seen outside the Sriperumbudur factory near Chennai, where workers set up tents to shield themselves from the heat. Union leader E. Muthukumar confirmed the strike had entered its second day.

The disruption impacted about half of the plant's daily output. Workers demand higher wages, better hours, and union recognition. Although Samsung India did not comment, a spokesperson stated the company engages with workers to address grievances and complies with all regulations.

The strike is poorly timed for Samsung, as India's festive season, a critical sales period, is fast approaching. Prabhu Ram, Vice President at Cybermedia Research, highlighted how the strike could hinder Samsung's production plans.

Approximately half of the factory's 1,800 workers are participating in the strike. The larger factory in Uttar Pradesh focuses on smartphone production. In South Korea, Samsung's largest worker union also held strikes in July and August, but the company reported no production disruptions then.

Indian political leaders attended Tuesday's protest, supporting the workers' demand for equal wages based on experience. Amid the protests, one poster urged state labor officials to side with the union in negotiations with management.

(With inputs from agencies.)