LG aims to become No. 1 electronics maker in RI next year

LG aims to become No. 1 electronics maker in RI next year

Reiner S., The Jakarta Post, Seoul

South Korea's giant LG Electronics will continue to push
marketing and promotion efforts in Indonesia next year despite
the general election period, in a bid to become the top
electronics maker in this country.

"We aim to become No. 1 next year," said Moon-Ik Jang, general
manager for corporate planning at PT LG Electronics Indonesia
(LGEI), during a recent press tour at LG facilities here.

He claimed that LG's washing machine and monitor products
already hold the largest market share in Indonesia, while TV,
refrigerator, air conditioner, and DVD player products were in
second position.

"We also want to see a significant jump in the sales of our
handphone products," he said.

LG, which entered the Indonesian cellular phone market in
2001, is currently ranked sixth in terms of sales volume.

The company expected handset sales to increase next year with
the launch of new models featuring the latest technology and
design.

LG, however, acknowledged that 2004 would be a tough year in
pushing promotion activities because of the general election.
Sport events, for example, will be very limited during this
period. The company has been active in sponsoring sport events
and other social and cultural events in a bid to boost LG brand
awareness in this country.

"We just really need to be more creative now," Jang said. He
declined to disclose the size of the budget for next year's
promotion program.

Jang said that winning the leading position in the Indonesian
market was a crucial part of LG Electronics' corporate goal to
become the global leader in home appliance electronics
and telecommunication equipment in the next 2-3 years.

"Indonesia is a very important market for LG," he said,
pointing out that the country of more than 220 million people
offered a huge opportunity for electronics makers.

"The developing market is growing at an annual rate of 10
percent, while the global average rate is 3 percent," Jang said.

LGEI plans to further expand its extensive distribution
networks to help meet the 2004 goal. Currently, the company has
15 branch offices and more than 578 dealers located in various
parts of the country. Most of the dealers are concentrated
in the heavily-populated island of Java, which contributes around
69 percent to the company's total sales.

Jang said that the toughest area would be competition in the
TV market, particularly with the inflow of cheap products from
China. "The TV market is the toughest with so many brands,
including from China," he said, adding that new producers could
easily enter the industry as it did not require heavy investment
as compared to refrigerator production. "But in refrigerator
we're going very fast."

He said that part of the strategy to win a greater share in
the TV market here was to continue promote its high-end products
to boost image and increase brand awareness.

Although the local TV market is 80 percent dominated by
conventional TV, LG is also playing in the high-end market. "We
called it the bi-polar strategy." LG's toughest competitor
in the conventional TV market is Sharp, while in the high-end
market is Sony.

Last month, LGEI opened its fourth TV production line at its
Tanggerang factory in a bid to become market leader.

The new US$1 million line is dedicated to producing 12,000
projection TVs per year.

LGE is capitalizing on its technological prowess in the
electronics industry to gain greater market share worldwide.
With a whopping $1.5 billion allocated for research and
investment in the 2003 investment plan, the company is truly
committed to continue develop promising next-generation
technologies and to secure global leadership in the core
business.

The giant electronics maker is at the forefront of home
networks, which represent the consumer electronics of the future.
The company has already come out with digital refrigerator with
LCD (liquid crystal display), allowing users to shop online, make
video phone calls and watch TV broadcasts. Moreover, the Internet
Turbo-drum washing machine can download washing instructions for
different laundry loads.

LGE has completed development of Internet-accessible air
conditioners and microwave ovens and continues to develop new
appliances such as washing machines that have Internet access.

LGEI's production target (units)

Products 2003(E) 2004 2005

TV 1.2m 1.4m 1.6m

Refrigerator 730,000 1m 1.5m
Room AC 70,000 100,000 200,000

Import target

TV 180,000 230,000 300,000
CD Rom 120,000 150,000 180,000
Mobile phone 75,000 250,000 420,000
Refrigerator 25,000 35,000 30,000
Washing machine 250,000 325,000 410,000
Room AC 75,000 120,000 125,000
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Source: LGEI