LG Electronics on Wednesday said that it would expand its overseas television (TV) production lines by relocating two of its manufacturing plants in Indonesia from South Korea. The company confirmed that it would also reduce its domestic production to boost its efficiency worldwide amid the COVID-19 pandemic.
The South Korean tech giant said that it would move two of its six production lines currently located in Gumi, South of Seoul, to its factory in CItibung, Indonesia. The TV maker plans to relocate the lines as soon as possible within the year.
According to LG, the Citibung TV plant would increase its production output by 50 percent. The company said that it plans to establish the Indonesian plant as its Asian production hub.
Founded in 1995, the Citibung factory currently produces televisions, monitors, and digital signage displays.
In a statement, LG said that under the latest restructuring, it plans to balance Gumi’s main factory with other plants abroad. The tech company would also increase output in its production lines located in Mexicali and Reynosa in Mexico, and Mlawa in Poland.
LG said that the move would reinforce LG’s production strategy to tackle the shifting demand for TVs globally. The decision would also realign the company’s regional cluster program.
With Indonesia as the Asian hub, Mexico would cover the North American market, while Poland would supply the European market. The increased capacities would also allow LG to provide consumers in Australia better.
Strengthening Capabilities
LG said that the Gumi plant would still act as the control tower in its TV business, strengthening its capabilities. The factory would also continue to produce premium products such as its rollable OLED TVs and ultra-thin “Wallpaper” TVs.
LG assured that, despite the capacity scale down at its domestic plant, the company would not lay off employees.
However, LG would relocate around 500 workers from the Gumi production lines to other solar and TV module production lines. Although, some 20 percent of them would transfer to the LG Digital Park research center in Pyeongtaek, Gyeonggi.
According to market tracker Omdia, in terms of value in this year’s first quarter, LG came in second with a market share of 18.7 percent. Samsung Electronics secured the first position with a market share of 32.4 percent.
