LG Electronics India Ltd. will build its third plant in India, signaling its growth plans in the fifth-largest economy despite deferring its $1 billion-plus public listing in the county.
LG Electronics is investing about $600 million over four years in the factory coming up in the southern state of Andhra Pradesh, the local unit of the South Korean chaebol said in a statement Thursday. The plant will start making air-conditioners next year, followed by washing machines, fridges and compressors through 2029, the Andhra Pradesh government said in a separate statement.
The investment underscores the importance of the world's most-populous nation for LG as it seeks to make the country a manufacturing base for its global operations. The move comes as a planned $1.5 billion initial public offering has been paused due to volatile market conditions, Bloomberg News reported last month citing people familiar with the discussions.
Lyu Jae-cheol, president of the LG Home Appliance Solution Company, called the investment an important step toward “enhancing our partnership with India,” in the statement.
Besides supplying to overseas markets, the new facility will help the consumer appliances maker meet the growing demand for white goods in the country, fueled by rising affluence and warmer summers.
India is expected to have about 240 million air conditioning units in 2030, up from 93 million last year, the International Energy Agency estimates.
LG may resume its listing plans but is not in a hurry.
“We will not be pressured to list immediately” and the company's final decisions will be made on market conditions and timing that would generate maximum value, Kim Chang Tae, chief financial officer of the parent LG Electronics Inc. said in an earnings call last month.
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