LG India aims to clock a turnover of $10 billion over the next five years

LG Electronics India Ltd. (LGEIL), the wholly owned subsidiary of South Korean conglomerate, has become the most revered brand in its space. The year 2004 was a landmark year for LG as it not only achieved its target of Rs 65 billion (highest for any company in this industry), but also saw the commencement of its second manufacturing unit at Ranjangaon, Pune, besides a plant at NOIDA, UP. LG Electronics’ South West Asia President and LGEIL’s Managing Director K. R. Kim speaks with Preeti Jadhav on the company’s leadership and its growth drivers. Excerpts…

LG has tremendous brand equity but competition is catching up? How do you plan to be different? The most important aspect is to continuously bring in new technology to the market place. Having said that, we have to maintain the quality of our products without which, we cannot be No. 1. We are consciously aiming to maintain these two aspects to sustain leadership.

How has LGEIL’s performed in the last year?

We have achieved a turnover of Rs 65 billion in 2004. In the colour TV segment, we have 25 per cent market share; in refrigerators, we have 36 per cent; in washing machines, we have 37 per cent market share; and in room air conditioners and micro-wave ovens, we have 40 per cent each. At present, mobile phones, Inform-ation Technology (IT) products and peripherals contribute about 15 per cent of our turnover in India.

What are the targets?

By 2010, we expect these products to contribute 65 per cent to the turnover. All in all, LG India aims to clock a turnover of $10 billion over the next five years. We want to capture the No.1 slot in every product and every segment. We also have introduced Smart Frost Free refrigerators, a unique product, which is developed exclusively by LG. We expect to sell 400,000 units this year.

Is LG electronics aiming to becoming the biggest spender when it comes to advertising?

We don’t want to make a ‘big hue and cry’ in advertising just for the sake of it; but want to be a ‘market-reality’ driven advertiser. Last year, our advertising budget was around Rs 2 billion. This figure includes on-ground and above the line activities. We spend more on below-the-line activities.

What kind of investments will LG make in India?

We are planning to infuse around Rs 11.25 billion in India over the next five years. Of this amount, Rs 5 billion will be used to expand the facility and recruit 3,000 personnel by 2010 for increasing production facilities at Ranjangaon, near Pune.

.. To read the entire story, grab your copy of Impact Advertising and Weekly magazine issue dated April 4-10, 2005