LG to invest B1.4 billion in Thailand next year
Written by Writer on Thursday, October 23rd, 2008
ELECTRICAL & ELECTRONIC GOODS
LG to invest B1.4 billion in Thailand next year
PITSINEE JITPLEECHEEP
Bangkok Post
Thursday October 23, 2008
Despite the economic downturn in its homeland, LG of South Korea will continue to invest heavily in Thailand at the cost of 1.4 billion baht next year and reduce costs to support long-term growth and cope with the financial crisis.
Thailand, Brazil and Russia have good potential, says LG Thailand’s Mr Lee.
Hyun Woo Lee, managing director of LG Electronics (Thailand) Co, the local marketing and distributing arm, said that to cope with the economic recession the parent firm had set two business strategies for LG subsidiaries: to focus on reducing operating costs and finding new market opportunities.
“Thailand, Brazil, India and Russia are among potential growth markets for LG next year,” he said.
Mr Lee said the company would spend 1.4 billion baht to improve its air-conditioner manufacturing facilities at its Rayong factory. Of the total, 170 million baht will go toward the LG commercial air-conditioner line, which should be among the company’s sales drivers next year along with mobile phones.
The production base for some commercial indoor air-conditioner products will be moved to Thailand next year because of cheaper operating costs and low customs duties.
“Thailand will become the production hub of LG commercial air-conditioners in Southeast Asia. This will improve our competitiveness and we expect its sales will triple to one billion baht next year,” he said.
Mobile phones are the other projected sales driver for next year. The company will spend 340 million baht, up to 40% of its total advertising and promotional budget, to promote them next year.
“Though overall mobile phone demand will be flat next year, LG sees huge growth potential because we have less market share in this sector.”
The company aims to increase mobile phone growth to 10% next year (one million units), up from 5% last year. It expects total market demand this year to hit eight million units.
Apart from marketing activities, LG plans to reduce its operating costs by 10% or 300 million baht next year. It expects domestic sales next year to grow by 20% from US$400 million this year.
The company said it had seen no impact so far from the global financial crisis on its export orders for November to January.
“Our export business may decrease in February next year. But we are confident that our sales will slightly increase because we will export more premium items such as top-loading washing machines and air-conditioners and also explore new markets,” Mr Lee said.
