LGE Makes India Second Global Production Base
- Forecasts revenues in India at more than $10 billion by 2010

LG Electronics (LGE) has announced three growth strategies aimed at the 1.1 billion people of India making the Indian market the second largest global production base following China. Under this strategy LGE has projected 2010 revenues in India will exceed US$10 billion, 10 times that of 2004. LGE held a second-plant groundbreaking ceremony in Pune, India, on Oct. 6, and disclosed its vision for the Indian market through a news conference held in Mumbai, a nearby city. Among 100 or so personnel participating in the ceremony were LG Chairman Koo Bon-mu, LG Electronics CEO Kim Ssang-soo, and the company's Indian subsidiary president K. R. Kim.

LGE CEO Kim said in the plant groundbreaking ceremony, "Pune is located near Mumbai, a traffic hub in southern India, and through the plant established in Pune, LG will drastically cut down on logistical costs. In this competing market of India among world? leading corporations, LG Electronics will use its existing plant in northern New Delhi and the new Pune plant in the southern area as its export hubs, and penetrate Asia, Middle East and Africa markets." The three strategies for the Indian market that the global electronics giant disclosed during the ceremony included: penetrates the south-western market of India through the new Pune plant near Mumbai, the second largest city in India, in addition to the existing northern plant; installs a new GSM handset production line in the new Pune plant and uses it as its second-largest global GSM handset production line after the Qingdao plant in China; and expands the current 750 R&D staff in India to 1,500 by 2007, striving to develop premium products and export 30 percent of India-manufactured products to Asia, Middle East and Africa markets by 2007.

LG Electronics' second new plant in Pune, India,  covers a total area of 211,200 square meters and is currently equipped with a production line to manufacture 600,000 TVs and 1 million refrigerators a year. The company is set to add production lines of air conditioners, washing machines, monitors, and electronic ovens, by 2005.

Also, LG Electronics is poised to install a GSM handset production line in the new Pune plant by early next year. The Pune GSM handset line envisages a capacity of manufacturing 2 million handsets annually, and the company expands it to become a global GSM handset production base with a capacity of an annual 10 million units by 2010.

In connection with its three growth strategies for the Indian market, LG Electronics will invest a total of US$150 million in establishing facilities and boosting R&D efforts in India by 2007. Specifically, it will invest US$53 million in the Pune second plant, another US$43 million in establishing the GSM line, and US$54 million in securing R&D manpower and boosting other efforts. Through these strategies, LG Electronics aims to penetrate the global market by using China and India as its core production bases, while operating its plants in Changwon and Gumi, Korea, as its main production bases. This way, the company is pushing to penetrate the global home appliance market

On the other hand, LGE CEO Kim said at the news briefing of local journalists held at Taj President Hotel in Mumbai, "Through bold investments and securing of top-class technological prowess, LG Electronics is committed to making India its second-largest global production base after China. We will achieve US$10 billion in sales in India by 2010 to leap toward the global top three position." Currently, LG Electronics manufactures TVs, refrigerators, air conditioners, washing machines, electronic ovens, and computers in Noida, a city near New Delhi in northern India. It has also been operating a software research center in Bangalore since 1998 in order to use the superior R&D human resources of IT-strong India.

During the period between January and September of this year, LG Electronics achieved top positions in the Indian market in areas of TVs with a 23.5 percent market share, CDMA handsets with a 55 percent, air conditioners with a 35 percent, refrigerators with a 26 percent, washing machines with 30.8 percent, and electronic ovens with a 40.9 percent, posting US$1 billion in sales. The company expects to post US$1.3 billion in sales this year, thus sweeping the Indian home appliance market.   nw