South Korea-based electronics manufacturer LG Electronics Inc. recently announced plans to invest an additional US$430 million in China, which it aims to build into its largest overseas production base.
LG, however, denied earlier media reports that it planned to purchase Chunlan (Group) Corp.'s refrigerator production arm.
"At this stage, we have no intention to buy Chunlan's refrigerator business," said Cheong Heui Park, senior vice president for sales and marketing of LG Electronics (China).
Park said the company's investment will be spent mainly on manufacturing information technology and electronic products, such as liquid crystal displays, cathode-ray tubes, mic-rowave ovens and air conditioners.
"Our business expansion here is driven by China's potentially huge market for information and electronic appliances," he added.
After entering the Chinese market in the mid 1990s, LG has invested about US$1 billion to set up 10 production plants nationwide. Its profits reached US$50 million last year.
As part of its ambitious goal to become one of the world's top electronics manufacturers by 2003, LG said it has put emphasis on the localization of its operations in China.
"We are localizing our Chinese operations in such fields as human resource management, and product research and design," said Park.
To date, LG has signed cooperation deals with a number of Chinese enterprises, including Chunlan, Nanjing Panda Electronics Co. and Shanghai Video & Audio Electronics Co. Ltd.
"Our sales channels in the country have been widened thanks to our partners' knowledge about the domestic electric appliances market," Park said.
Industry officials noted that LG's move reflected its intention to secure its foothold in China ahead of the country's pending accession to the World Trade Organization, which will be followed by an influx of foreign electronics giants.
(Eastday 05/21/2001)
