LG to Make Indonesia AC Production Base
May 29, 2003
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LG Electronics will make Indonesia a base for its air-conditioner (AC) production, PT LG Electronics (LGEIN) manager Danny Dharmawan said early this week.

"Demand for AC units in Indonesia is now on the rise so that we are determined to make Indonesia one of LG's production bases in Southeast Asia," he said on Tuesday at an Indonesian Products Expo.

Actually, according to Mr. Dharmawan, since 1996 LG has had an AC production line in Indonesia for the domestic market, but later moved its production facilities to Vietnam following the monetary crisis that lowered the purchasing power of consumers at home in 1997.

But now LG is developing its production facilities in Indonesia in line with the national economic recovery and increasing demand for AC units, he added.

Mr. Dharmawan said the production capacity was about 100,000 units per year for the local market.

He also said LG's investment in Indonesia in 2004 was projected at U.S. $90 million, of which $29 million would be used for research and development of products. The remaining $61 million will be used to finance expansion of production capacity.

Meanwhile, Sung Khiun, LGEIN marketing manager, said that the domestic market potential for AC at home was now increasing. He predicted that this year the domestic market would absorb some 500,000-600,000 units.

"We expect to get a 20 per cent share of the AC market potential," he said, adding that if the market continued to gain strength LG would concentrate its AC production on the domestic market. (ANTARA, Asia Pulse)

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