With sales topping $2 bn, South Korea's LG bets on India
Monday, June 01, 2009 (20:34:19)
Tags: Business News, South Korea's LG, bets, India
Seoul: South Korean chaebol LG, the third largest conglomerate in this country, has charted an ambitions plan for India, hoping to drive revenues from there by at least 20 percent from the present $2.14 billion, along with a 50 percent push to exports.
The company, which has a major presence in consumer durables and mobile telecom industries in India, also hopes to draw significantly from the $13.3 billion set aside for global research to launch new products in the South Asian country, top officials here said.
Environment-friendly technologies along with products oriented toward a healthier lifestyle would be the new focus areas as the company hopes to see its India operations contribute more to its global revenues from around 5 percent at present.
"Indian consumers are increasingly looking at products which can help provide a healthy environment," said Simon Hahm, vice president of LG Air Conditioning, who had helped start his group's operations in India in 1997.
"The general trend in appliances business is moving towards health conscious products. Our research shows this is the case in India as well," Simon told a group of visiting Indian journalists.
Among the new technologies that will be on offer in India is a new refrigerant for air-conditioners with a more environment-friendly version by 2010. The group will replace the existing gas that causes ozone layer depletion.
"The R-22A gas will be phased out gradually, and replaced by the R-410 A which is used in the European markets," said Virender Rana, from the commercial air-conditioning team at the LG's Changwon manufacturing facility.
"While the R-22A is a more potent refrigerant, conducive for extreme climates like India, it is harmful to the ozone layer. Comparatively the R-410A is more environment friendly," said Rana.
Under the umbrella of healthcare products, LG has also launched air-conditioners that remove dust and microscopic contaminants that cause allergy and asthma. Its new washing machines use steam technology to ensure hygiene and have features like detergent-free cleaning.
"We hope our healthcare products contribute 15-20 percent to the total revenues of LG in Asia where we are carrying out the campaign for healthy lifestyles," Simon added.
Speaking about the specific financial performance in India and the investment plan, LG officials said the group intended to pump Rs.4 billion ($80 million) towards marketing and Rs.2 billion ($40 million) for research.
"We hope to grow our revenues in India to Rs.130 billion ($2.6 billion). For that we will launch products across the consumer durables and home appliances categories. We also hope to see a 50-percent export growth from India," said Simon.
The group's facilities are located at Greater Noida in Uttar Pradesh, on the outskirts of New Delhi, and Pune in Maharashtra. The products include phones, TVs, air-conditioners, microwaves, washing machines, vacuum cleaners and disc drives.
LG Electronics has a global turnover of $44.7 billion employing over 84,000 people in 115 operations. It has five business units - home entertainment, mobile telecom, home appliances, air-conditioning and business solutions.(IANS)