LG Electronics expects robust sales in 2001

JAKARTA (JP): Electronics manufacturer PT LG Electronics Indonesia recorded US$170 million in sales in 2000, far exceeding the sales figure in 1999 of about $60 million and its initial target of $150 million, an executive said on Monday.

According to LG general manager Herman Surjadi, the company projected sales to increase by 47 percent this year to about $250 million.

He attributed the higher than expected sales in 2000 to the start of the company's exports of TVCRs to European markets last year.

The company started exporting TVCRs -- television sets with built-in video cassette players -- to Europe early last year, he said, adding that during the year it had exported about 250,000 units.

"The European market still demands video cassette recorders (VCR) because of their multiple channel TV. The VCR makes it easier for them to record their favorite programs while they watch another channel on TV," Herman said, explaining that the TVCR has no market in Indonesia due to the preference here for VCDs and Laser Disc players.

The launch of a new Flatron 15-inch television on the domestic and international markets in February is expected to be able to boost sales further this year, he said, adding that he hoped the company could record at least $250 million in sales this year with the help of Flatron.

"We are very optimistic (about our target) because the size of the market for electronics has also increased this year," Herman said.

LG marketing manager Sung Khiun said that the Indonesian electronics market increased about 30 percent this year, and was back to its precrisis levels.

Demand for televisions is projected to increase to about 2.4 million this year from 1.8 million in 2000, he said, while for refrigerators the figure is expected to increase to 1.2 million this year from 900,000 in 2000.

The demand for washing machines is also estimated to rise to 340,000 this year, from 250,000 the previous year, and air conditioners to 250,000 from 180,000 in 2000, Sung said.

The return of the demand for electronics to its precrisis level was mainly because of the increase in Indonesia's population rather than an improvement in purchasing power, he said.

"As we know, before the crisis there were about 40 million families in Indonesia, now the number is definitely far higher," Sung said.

In response to the increase in domestic demand for electronics, LG spent about $5 million last year on expanding its factory and adding another production line for its televisions which constitute about 50 percent of its total sales, Herman said.

"We need to add another production line in our factory (for producing 15-inch Flatron), because previously we only produced 14-inch and 20-inch color televisions and TVCRs for export," he explained.

This year, LG would also invest an additional $10 million to expand its production capacity for refrigerators, Herman said, adding that total investment as of 2001 amounted to about $46 million.(tnt)