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Hot Korean Summer Extends Production of Air Conditioners
Aug 13, 2004
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The hottest summer in 10 years couldn't come at a better time for South Korean makers of air-conditioners. With private consumption slumping, the heat wave and rising demand for heat-beating devices have come as a manna to them, analysts said.

Stockpiles of air-conditioners have already bottomed out, plants are running at 24-hr full capacity, and they've decided to extend production into this month, a rarity for the industry.

LG Electronics Inc., said to be the world's largest maker of air-conditioners by sales, said it will continue production until the end of this month, due to a backlog of orders. Usually, the company halts production for domestic consumption in June, but continued orders after July made it shift to a 24-hr, three-shift work system this month, company officials said.

The heat spell sent the mercury soaring to 35 degrees Celsius or higher in some parts of the country, with nighttime temperatures remaining higher than 25 degrees Celsius.

Given the present situation, the management and labor union at LG Electronics agreed to postpone summer holidays scheduled for Aug. 1-5 and instead continue production, for the first time in 10 years.

Sales of air-conditioners soared 60-70 percent year-on-year in July, and accumulative sales have jumped more than 30 percent this year, LG Electronics said.

Samsung Electronics Co., considered the country's biggest home appliance maker, also decided to extend production into August, as orders did not relent in July, the usual peak time for demand, according to company officials.

"Since 1994, we have increased production capacity drastically. But this year, we have to produce air conditioners even in August," a Samsung official said. Its sales shot up about 70 percent in July.

Daewoo Electronics Co. said that sales of air-conditioners will rise about 70 percent year-on-year in August, given that sales surged more than 100 percent month-to-month in July.

In addition, the number of air-conditioners imported into the country climbed 21 percent year-on-year in July to U.S. $9.54 million, according to government data, as domestic production is unable to meet demand caused by this summer's sweltering weather.

Power consumption topped a record 50-million-kilowatt peak twice last month as a scorching heat wave forced people to use air-conditioners and other devices to cool off. On July 29, demand for electricity spiked to 51.26 million kilowatts at one point in the day.

Government officials predict this summer's record for electricity consumption will be set around the middle of August, saying power consumption should fall between late July and early August, when most South Koreans take summer holidays. (Yonhap)

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