LG Electronics India is eyeing 25-30 per cent growth from the home appliance business in 2023. It aims to garner about ₹25,000 crore revenue from this segment alone. The South Korean consumer products major on Tuesday said it has invested ₹200 crore to expand its Pune plant to support manufacturing of side-by-side refrigerators in India.
The company already manufactures single door and double-door refrigerators across its facilities in Greater Noida and Pune.
Hong Ju Jeon, MD, LG Electronics India, said the company has been consistently investing in expanding its manufacturing footprint in the country. “We are fully committed to the government’s Make-in-India vision. Last year, we began manufacturing windows inverter ACs at the Noida plant. Now, we have invested ₹ 200 crore in setting up the manufacturing line for side-by-side refrigerators at the Pune plant. We will continue to expand our local production operations,” he added. The plant will have an annual production capacity of 200,000 units of side-by-side refrigerators,” he added.
Focus on local manufacturing
The company’s focus on local manufacturing of side-by-side refrigerators in India comes at a time when sales of premium appliance products have surged in the past three years. At the same time, the consumer durables industry has stepped up focus on localisation amidst global macro-economic volatility
Hyoung Sub Ji, Director, Home Appliances & AC at LG Electronics India told businessline that the company expects contribution of side-by-side refrigerator segment to total category (refrigerator) sales to increase to about 25 per cent in 2023 from the current 15 per cent. “In the post-Covid times, premium products such as side-by-side refrigerators have seen strong traction in the country and we expect this growth momentum to continue,” he added.
Pent-up demand and strong growth in the premium segment helped LG India rake in ₹20,000 crore revenue in the home appliance segment in 2022. “We are targeting a growth of 25-30 per cent this year and expecting to clock revenues of Rs 24,000-25,000 crore in the home appliance segment,” he added. Home Appliance business contributes a significant chunk to LG India’s overall revenues.
LG India said that its share in the side-by-side refrigerators is estimated at about 50.8 per cent in 2022.
Side-by-Side refrigerator segment is estimated to have grown at a CAGR of 19 per cent in the 2017-2022 period in India. As per industry estimates, in the past SBS refrigerators’ share was merely 2-3 per cent of the total ref category and post the pandemic, its contribution has grown to about 7-8 per cent.
(The writer was in Pune at the invitation of LG India)