LG Indonesia boosting DVD player production

Evi Mariani, The Jakarta Post, Jakarta

South Korean electronics giant LG Electronics is boosting the production of its digital video disc (DVD) player in Indonesia in response to the surge in demand for the product.

"Currently, LG's audio-video plant produce six types of DVD players," Randy, spokesman of PT LG Electronics Indonesia's audio-video marketing department, told The Jakarta Post on Wednesday. "By the end of this year, LG targets to add four new types of DVD players."

The company has been producing refrigerators and televisions in Tangerang, Banten, for many years. Since the beginning of this year, it has been producing DVD players, home theater sets and VCD compo (audio-video set) in Cibitung, West Java.

Randy said that the Cibitung audio-video plant had an annual capacity of producing 100,000 DVD players, 100,000 VCD compo sets and 50,000 home theater sets.

So far, LG has three electronics plants in Asia, namely in China, South Korea and Indonesia. In terms of capacity, the China plant is the largest, while the plants in Indonesia and South Korea are the second and third largest, respectively.

The China plant now produces 30 types of DVD players.

"But due to Indonesia's growing market, LG has planned to focus its audio-video production in Indonesia," Randy said.

He said 30 percent of LG's electronics products in Indonesia was consumed by the domestic market. The remaining 70 percent was exported to Asia-Pacific countries like Thailand, Australia and the Philippines.

Before LG started audio-video production in Indonesia, its products sold on the domestic market were all imported from China and South Korea.

Now that LG produces the products in the country, their prices have dropped by 50 percent.

"Previously, the prices of DVD players -- our most popular products -- ranged between Rp 1.5 million to Rp 3 million. Now, the prices range between Rp 800,000 to Rp 1.5 million," Randy said.

Thanks to the falling prices, LG's DVD player sales jumped to 30,000 units in the first semester of the year, compared to its total sale of 10,000 units last year. "We expect sales to reach 100,000 units this year," Randy said.