LG India Expects 10% Growth, Exploring New Business Categories As Health Care, Says MD

LG Electronics India expects around 10% growth in FY24 and is exploring new business categories such as healthcare and water purification here, besides investing further in its manufacturing ecosystem, its Managing Director Hong Ju Jeon said on Wednesday.

India is an important market for the South Korean chaebol, where it sees "big potential" as the economic situation is bright compared to other global markets with a growing population with more youths, he said.

The company is working towards increasing the domestic value addition of India-made products and is even inviting its sister concerns from South Korea to set up plants for component manufacturing here, Jeon told PTI in an interaction here.

It is also looking to increase exports to other countries from India by enhancing its cost competitiveness and adding more products to its offerings.

"We will support the India government's make-in-India initiatives, increase exports from here, and contribute to the Indian economy," said Jeon.

Jeon also lauded India's growth story this year and said its economy is growing despite other markets facing tough times on account of global disruption from war and other factors.

When asked about the growth expectation of LG's business in India, he said, "LG also has the same expectation. Even the business in other countries will reduce compared to the rest of the year, but we (LG Electronics India) will grow."

LG Electronics expects to grow in double digits, higher than the GDP numbers.

"We would grow around 10% and gain more market share," Jeon said, adding that the growth would be secular and would come from all the product categories.

Besides, the company is exploring new opportunities in areas such as health care and water purification. LG Healthcare Solutions provides a product suite for hospitals and healthcare facilities.

India is the second-largest market for LG Electronics globally after the U.S., and the South Korean chaebol expects to retain its growth momentum here.

Over the investment, Jeon said, "Our company is thinking in the long term. We are checking what kind of investment is required. Also, product-wise, we are studying new businesses."

Presently, LG has two manufacturing units in Ranjangaon, Pune, and Greater Noida.

The company has recently invested around Rs 200 crore in a new line for manufacturing the premium range of side-by-side refrigerators at the Ranjangaon facility and Rs 100 crore in Noida to start local manufacturing of dual inverter air conditioner compressors.

On being asked whether LG would set up another unit in India, Jeon said, "We need more capacity for the future. We do not know where it will be, but we will, of course, 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. "The population of India is growing with a high number of young people," he said, adding, "Our internal management (LG Global) is very interested in the India market."

It is also working on India-centric products in segments such as air conditioners, making them more affordable.

Regarding LG Electronics India's exports, Jeon said they are still in the single digits but will grow. To increase exports, it requires more localization and more products.

However, he also added that LG Electronics has several factories globally that compete with each other. To increase exports, the cost competitiveness of India-made products would have to be enhanced.

"On the cost front, we need more efforts in terms of localization and more products for exports," he said, adding that it's not easy, "but it's very clear that we want to increase exports from here. We need to increase the volume, then the cost of production will be down."

This can also benefit Indian consumers.

Regarding the sourcing of components, 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, it should also support them for stable operations." "The company, LG Chemical, also started to manufacture to support the local production," said Jeon.

"We will invite more foreign countries to invest here."

Over the Production-Linked Incentive Scheme scheme floated by the Indian government, Jeon said, "We have invited our sister companies. Those companies were sub-contractors in Korea, and they are also coming to supply us here."

LG Electronics India on Wednesday launched its 2023 OLED TV line-up of 21 models across different variants. This includes the world’s only 8K OLED Z3 series, the OLED evo Gallery Edition G3 series, the OLED evo C3 series, and the OLED B3 and A3 series TVs.

Its price ranges from Rs 1.19 lakh to Rs 75 lakh for a rollable TV.

For the financial year that ended on March 31, 2022, LG Electronic India's profit after tax was Rs 1,174.7 crore, and its total income was Rs 17,171.3 crore. Its exports in FY22 were worth Rs 976 crore.