JP/13/13LG

LG invests $1m for digital TV production line

Eva C. Komandjaja The Jakarta Post Jakarta

PT LG Electronics Indonesia (LGEIN) has invested US$1 million to open a new production line capable of producing 12,000 digital projection TVs a year.

The new production line, which is the fourth line at the company's Tangerang factory, is expected to boost LG's market share in Indonesia from 10 percent in 2003 to 20 percent in 2004.

With the new line, LGEIN is also looking to become a market leader in projection TVs by 2005 with 30 percent of the total projection TV market share in Indonesia.

Young Ha Kim, president of LGEIN, said on Monday the market growth for digital TVs in Indonesia was projected at about 50 percent a year. He estimated that LG could increase its sales from 20,000 units in 2003 to 30,000 units in 2004.

Kim said it would be more efficient and more flexible to build projection TVs here in Indonesia, rather than importing them from outside.

The 40-meter-long line has produced five TV models, two of which are 43-inch TVs, one is 44 inches and two 54 inches. Every unit produced by the line has a local content of 10 percent.

However, Kim said LGEIN realized that digital TV prices remained high. The TVs are aimed at the middle to upper classes, so LGEIN is displaying the products in shopping malls, private clubs and upscale restaurants to increase sales.

Currently, about 75 percent of LGEIN's production in Indonesia is of conventional TVs. Flat TVs account for 20 percent, projection TVs 5 percent, while the rests are LCDs and CRTs.

LGEIN expects that in 2006 only 40 percent of the total market in Indonesia will use conventional TVs, while the rest will be using high-tech TVs such as digital or LCD TVs.

Currently, LGEIN produces approximately five million TV units a year, of which 45 percent are exported to other countries.