- LG said the move will enable it to better serve consumers in Asia and Australia
- The company’s Cibitung facility will increase its annual capacity by up to 50 per cent
LG Electronics has announced expansion of its TV business with an eye on further diversifying its production footprint and stepping up capacity. The key component of this strategy will be LG’s Cibitung facility in Indonesia which will become the company’s new regional hub, taking over two of the six production lines currently running at in Gumi, South Korea.
“The move is expected to boost the efficiency of LG’s TV manufacturing across the globe, with Gumi maintaining its status as the control tower and taking on more work for LG’s other growing businesses,” read LG’s official statement.
Production strategy aligned with shifting demand
The move is part of a larger picture to realign LG’s production strategy to be more closely aligned with shifting demand. Increasing capacity at the Indonesian site will allow LG to better supply consumers in Asia and Australia. The greater European market will continue to be supplied by the Mlawa plant in Poland while Reynosa and Mexicali in Mexico will be the primary source of TVs for LG in North America.
Established in 1995, the Cibitung facility will be upgraded with advanced automation across all production processes including assembly, quality inspection and product packaging to produce TVs, monitors and digital signage products. With the expansion and upgrade, LG Cibitung will increase its annual capacity by up to 50 per cent.
LG Gumi’s role as the control center for LG’s TV and related display businesses worldwide will become even more important as it focuses on the manufacture of high-tech displays such as LG’s ultra-premium TVs and medical monitors. Gumi will be the center of research and the testing ground for more efficient manufacturing processes.
The company’s first-quarter 2020 consolidated revenue figure stood at KRW 14.73 trillion (USD 12.45 billion) and operating profit of KRW 1.09 trillion (USD 921.47 million). LG said that although revenue declined modestly compared with the same period last year, operating income improved 21.1 per cent from the 2019 quarter making this only the second time in history when quarterly operating profit exceeded KRW one trillion. The 7.4 per cent operating margin was the highest in LG’s history for a first quarter.
