LG Electronics will set up a holding company for its European operations by realigning 14 sales affiliates under a holding firm in August. The establishment of a sales holding firm in Europe by LG Electronics follows the successful operation of LG Electronics China Holding Company, a holding firm supervising all sales, production, and logistics operations in China set up in 1995.
LG’s board of directors has decided to transform LG Electronics Service Europe (LGESE), a logistics subsidiary positioned in the Netherlands, into a holding firm in charge of all European operations to create synergy in marketing activities. The 14 other European sales and production subsidiaries will be rearranged under LGESE in August.
Under the plan, LG Electronics will hand over all stakes in the 14 European sales and production subsidiaries worth 8.46 million euros, or some 650 billion won, to LGESE.
"We decided to switch European sales units into a holding company structure to reinforce our sales in Europe. Adopting a holding company system is a part of our localization efforts in overseas markets," an LG Electronics spokesman said. "We anticipate that closer and more systematic cooperation among European sales subsidiaries under a solid sales holding company system will create synergy and boost sales in the region."
LG Electronics said the realignment of European sales and production subsidiaries under the new holding firm system would not follow a sweeping change in functions of the 14 companies because LGESE has previously functioned as a de facto holding firm for its European sales operations.
"Nevertheless, there have been some glitches for it to effectively direct LG Electronics’ sales activities across Europe; thus, we believe that turning LGESE into an official holding firm will remove such obstacles for smoother cooperation in marketing and sales activities,’" the official said.
LG Electronics seeks to turn North America, China, and Europe into launch pads to reach the goal of becoming one of the top three home electronics suppliers and a leading digital trendsetter by 2010.
The electronics company believes that bulking up in the European market is a must for it to join the ranks of the world’s top-tier electronic heavyweights such as General Electric of the United States.
"We’re not going to dismiss the possibility of setting up holding companies that will function as regional sales headquarters in other regions, including North America and Southeast Asia," the spokesman said. "But it is still early to discuss such possibility."
Thirteen subsidiaries that will come under the new overseas holding firm are LGEDG (Germany), LGEFS (France), LGEIS (Italy), LGEUK (U.K.), LGEMK (Hungary), LGEPL (Poland), LGECZ (Czech Republic), LGERO (Romania), LGESW (Sweden), LGEES (Spain), LGEPT (Portugal), LGEHS (Greece), and LGEAL (Belgium). LG Electronics Wales (LGEWA), a production subsidiary of the Korean electronics giant, will also fall under LGESE’s command. (Korea Times)
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