LG Electronics India expects growth of around 10 percent in fiscal 24 and is exploring new business categories here as well as investing more in its manufacturing ecosystem, CEO Hong Ju Jeon said on Wednesday.
India is an important market for the South Korean chaebol, where he sees “great potential” as the economic situation is bright compared to other global markets with a growing population with more youth, he said.
The company is working to increase the domestic added value of Indian-made products and is even inviting its South Korean sister companies to set up component manufacturing plants here, Jeon told PTI in an interaction here.
It also seeks to increase exports to other countries from India by improving cost competitiveness and more products in its offerings.
“We will support the Indian manufacturing initiatives of the Indian government and increase exports from here and contribute to the Indian economy,” Jeon said.
Jeon also praised India’s growth story this year, saying its economy is growing despite other markets facing hard times due to the global disruption of war and other factors.
When asked about the growth expectations of LG’s business in India, he said, “LG also has the same expectations. Even the business in other countries will be down compared to the rest of the year, but we (LG Electronics India) will grow.” “.
LG Electronics expects to grow in double digits, above the GDP figures.
“We would grow around 10 percent and gain more market share,” Jeon said, adding that the growth would be secular and would come from all the categories it operates in here.
India is the second largest market for LG Electronics globally after the US and the South Korean chaebol is hoping to maintain his growth momentum here.
About the investment, Jeon said, “Our company is thinking in the long term. We are checking what kind of investment is required. Also in terms of new products, we are studying for new business.”
LG currently has two manufacturing units in Ranjangaon, Pune and Greater Noida.
The company recently invested around Rs 200 crore in a new line to manufacture the premium range of side-by-side refrigerators at Ranjangaon facility and Rs 100 crore in Noida to start local manufacturing of dual inverter air conditioner compressors .
Asked if LG would set up another unit in India, Jeon said, “We need more capacity for the future. We don’t know where it will be, but of course we will have new factories.”
LG Electronics India is a wholly owned subsidiary of South Korea-based LG Electronics. It is a formidable brand in India, operating in various segments such as consumer electronics, home appliances, HVAC, and IT hardware.
“India’s population is growing with a large number of young people,” he said, adding: “Our internal management (LG Global) is very interested in the Indian market.”
It is also working on India-focused products, in segments like air conditioners, making them more affordable.
Regarding the export of LG Electronics India, Jeon said that it is still in single digits, but it will grow. Increasing exports requires more location and more products.
However, he also added that LG Electronics has several factories globally, which compete with each other. To increase export, the cost competitiveness of products made in India would have to be improved.
“In terms of costs, we need more efforts in terms of localization and more products to export,” he said, adding that it is not easy “but it is very clear that we want to increase exports from here. We need to increase the volume, then the cost of production would be reduced.
This can also benefit Indian consumers.
Regarding component sourcing, Jeon said the localization rate is high in India, but added that the industry still needs more support from the Indian government.
“When (global) suppliers want to invest in India, they should also support them for stable operation. Companies like LG Chemical also started manufacturing to support local production,” Jeon said. “We will invite more foreign countries to invest here.”
On the Production Linked Incentive (PLI) scheme put forward by the Indian government, Jeon said, “We have invited our sister companies. Those companies that were subcontractors in Korea and will also come to supply us here.”
For the fiscal year ending 31 March 2022, LG Electronic India’s profit after tax was Rs 1,174.7 crore and its total revenue was Rs 17,171.3 crore. Its exports in FY22 were Rs 976 crore.
(Only the headline and image in this report may have been modified by Business Standard staff; all other content is auto-generated from a syndicated feed.)
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