LG promises to keep RI its home appliance hub

Evi Mariani The Jakarta Post Jakarta

PT LG Electronics Indonesia vows to keep Indonesia as its regional manufacturing hub for home appliances -- such as television sets, refrigerators and air-conditioners -- for Southeast Asia.

"Sixty five percent of our total production capacity is absorbed by Indonesia's market, and the remainder is exported to ASEAN countries," stated an LG press release made available on Thursday.

The Association of Southeast Asian Nations (ASEAN) Free Trade Agreement (AFTA), which came into effect in January this year, is meant to turn the region into a single market. Ideally, it means multinational firms operating in one ASEAN country can sell their products throughout the region virtually tariff-free.

LG is a South Korean-based company, whose electronic plants in Asia located in China, South Korea and Indonesia. In terms of total capacity, China's plant is the largest, Indonesia's the second and South Korea's the third.

In Indonesia, LG first built its refrigerators and televisions plant in Tangerang. Later, it built an audio-video plant in Cibitung, West Java.

"From year to year, LG Indonesia's investment has been steadily increasing," said LG Indonesia's general manager Moon Ik Jang on Thursday. "Our investment for research and product development reached only US$20 million last year, so we increased the investment for research and development to $25 million in 2003."

LG Indonesia estimated the company would absorb 2,000 workers in 2003, up 30 percent from 1,500 jobs last year.

It also expected a 14 percent growth in television sales to 630,000 units in 2003 from 550,000 in 2002. Next year, the TV sales are forecast to jump to 860,000.

In a bid to boost services for its customers, LG Indonesia provides a free-of-charge call center to handle complaints from its customers.