LG boosts high-end products to meet target<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
In a bid to meet this year's sales target, LG Electronics
\nIndonesia (LGEIN) is planning to boost the production of its
\nhigh-end products, as data has shown that wealthy consumers were
\nnot affected by the March fuel price hike.<\/p>\n
In its first semester performance report, LGEIN, the local
\nsubsidiary of South Korean LG Electronics Inc., projected to
\ntriple the production of plasma TVs, flat-screen TVs and
\nprojection screens from 2000 units last year to 6,000.<\/p>\n
The move is aimed at boosting the company's sales to achieve
\nits US$380 million target this year.<\/p>\n
\"We are now going for the middle- and upper-income consumers,
\nbut still want to maintain our market share with low-end
\nproducts,\" LGEIN Area Sales Manager Hendru Susilo, who handles
\nsales outside Java and Bali islands, said at a press conference
\non Thursday.<\/p>\n
The firm's sales from January to June only reached $180
\nmillion, 10 percent off its target of $200 million.<\/p>\n
LGEIN Area Sales Manager for Java and Bali Iwan Sutanto
\npointed to domestic consumers' weakening purchasing power as the
\nmain reason for lower sales.<\/p>\n
\"The fuel price hike, the strengthening U.S. dollar against
\nthe rupiah and a series of disasters in this year's first
\nsemester have weakened the people's purchasing power,\" he said.<\/p>\n
Instead of reducing production capacity, Iwan explained, the
\ncompany preferred to focus on increasing its \"unique sales point\"
\nproducts to attract wealthy consumers.<\/p>\n
LG has long been a market leader for computer monitors,
\nwashing machines and air conditioners in Indonesia. It currently
\ncontrols 35 percent, 19 percent and 16 percent of the market
\nshares, respectively.<\/p>\n
However, the company has had to endure barriers to expansion
\nhere.<\/p>\n
LGEIN Manager for General Affairs Adji Wiratma said the
\nheavily damaged roads surrounding the company's plant in
\nTangerang, Banten, would discourage potential buyers.<\/p>\n
\"The roads connecting Karawaci, Legok and Cirarab in Tangerang
\nare the only way to access our factory. But the road conditions
\nare very poor. Despite that, the local administration has not
\nbeen able to address the problem,\" he complained.<\/p>\n
Adji said 3.9 kilometers (km) of the 11.1 km road was badly
\ndamaged with some holes up to two meters in diameter all along
\nthe way. The road condition greatly hurts efficiency as vehicles
\nare unable to easily get in and out.<\/p>\n
LGEIN along with 23 large companies and dozens of small and
\nmedium enterprises in the area have suffered losses due to the
\npoor infrastructure.<\/p>\n
\"It takes half an hour to go just 3.9 kilometers on the ruined
\nsection of road. The heavily damaged road puts off potential
\nclients\/buyers as they doubt whether the products will still be
\nin good condition after getting battered about in the trucks as
\nthey leave the factory,\" Adji said.<\/p>\n
He warned that if the government or local administrations did
\nnot repair the road soon, LG headquarters in Korea might consider
\nclosing its Indonesian operation.<\/p>\n
\"What if the headquarters decides to move the factory to
\nanother country with better infrastructure?\" he asked.<\/p>\n
In addition to the artificially high cost of doing business as
\na result of corruption and illegal fees, bad infrastructure has
\nbeen a major problem that contributes to a weak investment
\nclimate in the country. (006)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/lg-boosts-high-end-products-to-meet-target-1447893297",
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"sponsor": "Okusi Associates",
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