Workers' strike hits Samsung production at key India electronics plant

By Praveen Paramasivam

SRIPERUMBUDUR, India (Reuters) -Operations at Samsung Electronics' plant in southern India were disrupted for a second day on Tuesday by hundreds of employees striking for higher wages, in a rare episode of labour unrest for the South Korean company.

India's biggest consumer electronics company, Samsung counts the South Asian nation as a key growth market, where it competes with the likes of LG Electronics, turning out everything from televisions and refrigerators to smartphones.

The strike-hit plant, the smaller of Samsung's two Indian factories, employs around 1,800 people and makes electronic products rather than the company's better-known smartphones.

But it still contributes 20% to 30% of the company's annual revenue of $12 billion in India, said two sources with direct knowledge of the matter, speaking on condition of anonymity.

Posters with the words "Indefinite Strike" went up outside the factory in Sriperumbudur near the city of Chennai, where hundreds of workers in company uniforms set up tents to shade themselves from the heat.

"We are striking for the second day," said union leader E. Muthukumar.

About half of the factory's daily production was affected when many workers stayed away on Monday, and the protesters continue to press their demand for higher wages, better hours and company recognition for the union.

Shares of Samsung Electronics in Seoul closed down 1.9%, versus benchmark KOSPI's 0.5% fall.

Samsung India did not respond to a request for comment. On Monday, a spokesperson said it actively engaged with workers "to address any grievances they may have and comply with all laws and regulations".

Around 800 workers signed a register kept outside the factory to record their protest.

The strike comes ahead of India's festive season when consumers buy gifts or items for personal use, lured by discounts offered by manufacturers.

"A strike at this point puts a spanner in Samsung’s production ramp-up ahead of the all-important festive season sales beginning October," said Prabhu Ram, a vice president at Cybermedia Research.

In South Korea, the 36,500 members of Samsung Electronics' biggest worker union who have been demanding higher wages and benefits, held a strike for several days in July and August.

In late July, however, the company said the action did not disrupt production there.

In India, its workers are demanding equal remuneration for those with the same length of experience, according to at least half a dozen employees Reuters spoke to on condition of anonymity.

"If they (Samsung) had given us a living wage and treated us with respect, we wouldn't have thought of joining a union," said one worker outside the factory who declined to be named fearing reprisal from the company.

Their concerns were backed by some Indian political leaders who attended Tuesday's protest.

One poster outside the factory exhorted state labour officials not to support the management, advising instead: "Discuss and solve demands from the labour union with union officials."

(Writing by Aditya Kalra; Additional reporting by Hyun Joo Jin in Seoul; Editing by Clarence Fernandez and Christina Fincher)