LG Electronics begins construction on Rs 5,000-cr mfg unit in Andhra Pradesh

The Print

08-05-2025

Slated for completion by the end of 2026, the plant spread across 1 million square meters will roll out 800,000 refrigerators, 850,000 washing machines, 1.5 million air conditioners, and 2 million air conditioner compressors annually.
The South Korean giant's investment in the rising industrial corridor in Andhra Pradesh is the largest single stage electronics investment in South India.
Sri City (Andhra Pradesh), May 8 (PTI) LG Electronics on Thursday began the construction work on its Rs 5,000-crore home appliance factory here — its third plant in India, as part of a broader push to strengthen its presence in one of the world's fastest-growing consumer markets.
A groundbreaking ceremony at the construction site was attended by Andhra Pradesh's Minister for Human Resources Development Nara Lokesh and senior LG Electronics India Ltd (LGEIL) officials, the company said in a statement.
Production is expected to begin at the end of the next year, starting with air conditioners, followed by washing machines, refrigerators and compressors through 2029.
The unit will be the Korean tech giant's third facility after existing factories at Noida, near Delhi, and Pune.
Once the new site becomes operational, LG's combined annual capacity in India will rise to 2 million televisions, 3.6 million refrigerators, 3.75 million washing machines and 4.7 million air conditioners.
It is the first large manufacturing complex to commence work under the new Andhra Pradesh government's electronics manufacturing policy.
The Andhra Pradesh cabinet gave nod for the unit in November 2024 and work commenced in record time of less than 6 months.
As many as four suppliers of LG Electronics are coming to India for the first time. They have also confirmed their investment of Rs 839 crore into the same area (Sri City premises).
The government of Andhra Pradesh has provided 247 acres of land at Sri City to LGEIL for the new plant that is expected to generate around 1,900 direct and indirect jobs.
'We are delighted that LG ELectronics has chosen Sri City for its third manufacturing facility in India. This is a testament of LG Electronics' commitment to India and I am confident that this expansion into Andhra Pradesh will address the potential growth in demand for LG products across India,' Naidu said.
This new plant is expected to cover a site area of 1 million square meters, with a total floor area of 220,000 square meters. LGEIL's investment in this facility will be to the tune of USD 600 million (Rs 5,001 crore) over a period of four years and brings with it the potential to bring ancillaries to the region, thereby creating an ecosystem for white goods manufacturing in the State of Andhra Pradesh.
Besides serving India's vast consumer base, the products from the Sri City factory will also be exported to neighbouring markets such as Bangladesh and countries across the Middle East.
For the firm that entered the Indian market with its first plant in Noida in 1997, the Sri City plant marks a critical step in localizing supply chains and scaling up output to meet soaring demand for modern home appliances among India's rapidly expanding middle class.
As global companies reassess supply chains amid shifting geopolitical and economic currents, LG's investment also signals confidence in India's manufacturing infrastructure and its role as a production base for the broader region.
India's current household penetration rate for washing machines is at 30 per cent and for air conditioners at just 10 per cent, suggesting major growth opportunities.
The new facility will mainly produce high-end lines, such as French door refrigerators and front-loading washing machines. LG has already introduced India-specific models, such as convertible refrigerators tailored for vegetarian diets and washing machines with a dedicated cycle for traditional clothing like sarees.
LG is looking to list its Indian unit, in a bid to tap into the country's bustling capital market. The IPO, which was valued at around Rs 15,000 crore, was initially expected to be in May, but has been delayed due to market volatility sparked by the US tariff uncertainty.
Earlier on December 6, 2024, LG Electronics India Ltd, a subsidiary of the South Korean chaebol LG, had filed preliminary papers with Sebi for an initial public offering, wherein the parent company will sell over 10.18 crore shares amounting to 15 per cent stake.
The proposed IPO is entirely an offer-for-sale (OFS) of 10.18 crore equity shares by promoter LG Electronics Inc with no fresh issue component, according to the draft red herring prospectus (DRHP).
Its South Korean parent company LG Electronics Inc will sell 10,18,15,859 equity shares of face value of Rs 10 each, according to the DRHP. Since the public issue is completely an OFS, LG Electronics India will not receive any IPO proceeds. The funds raised will go to the South Korean parent.
LG Electronics India is a leading player in major home appliances and consumer electronics. The company's products are sold to both B2C (business-to-consumer) and B2B (Business-to-Business) customers in India and internationally. It also provides installation, repair, and maintenance services for all its products.
LG Electronics India's revenue from operations was Rs 64,087.97 crore for the financial year ended March 31, 2024. PTI KRH DRR
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