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|May 21, 1999||
LG lines up $ 50 million investment in India
LG Electronics of Korea is contemplating producing liquid crystal display or LCD monitors in India under a joint initiative with Royal Philips Electronics of the Netherlands.
Although a final decision to this effect is yet to be arrived at by both the companies, LG is seriously considering India as a target market for joint launches with Philips, Michael Ahn, senior vice president of LG Electronics' home appliances (overseas sales division) said.
However, no time-frame has been set for introducing the joint branded monitors in India.
''We are also yet to decide whether a separate company would be set up for the purpose or whether the LCD monitors would be produced through our existing subsidiary -- LG Electronics India Limited,'' Ahn said.
The negotiations are a fallout of the recent agreement reached between the two global consumer electronics majors.
Philips would pick up a 50 per cent stake in LG LCD Inc, the active matrix liquid crystal display or AMLCD business of LG, for $ 1.6 billion. Under the letter of intent signed and approved by the board of directors of both sides, Philips Electronics and LG LCD will hold equal rights to manage the joint venture.
''This partnership will lead LGLCD to solidify its position as one of the world's largest LCD manufacturer. Initially, we are targetting the domestic market in Korea and would later be extended to other markets like India,'' Ahn added.
Globally, LCD moniotrs account of 30 per cent of LG Electronics' sales.
Through this alliance, LG Electronics seeks to not only improve its financial structure but also its global competitiveness.
LG Electronics has firmed up plans to invest $ 50 million to establish a resource base in India.
The company has also set an export target of $ 5 million for 1999, which would contribute to 2.5 per cent of the total projected turnover for the year, LGEIL vice president (sales and marketing) Rajeev Karwal said.
The company expects to take this up to five per cent or $ 15 million by the year 2000. It has already started its first exclusive showroom at the Maldives in February this year. It hopes to export to all SAARC countries, Thailand, the Philippines, Malaysia and Australia by 1999-end.
LG Electronics has already invested $ 60 million in its Indian subsidiary and plans to put in another $ 50 million here. Of this, $ 5 million would be used within this year.
LG Electronics also has plans to invest $ 20 million in a refrigerator unit within its existing premises in Surajpur in Uttar Pradesh by the year 2000. It hopes to be capable of churning out 500,000 units of colour TVs, 200,000 refrigerators, 25,000 washing machines, 150,000 air-conditioners and 100,000 microwave ovens per annum by the end of next year.
Meanwhile, to commemorate the completion of one year of manufacturing operations in India, LG Electronics India, a wholly-owned subsidiary of the South Korea-based LG Electronics, has launched its ''millennium dream'' range of home appliances.
The new products include Dios, a multi-door refrigerator, front-loading washing machines and air-conditioners.
The Dios is priced at Rs 125,000 while the front-loading washing machine is priced at Rs 29,000. The air-conditioner is Rs 2,000 dearer than the existing 1.5 tonne model.
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