LG Electronics begins construction on Rs 5,000-cr mfg unit in Andhra Pradesh
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
This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
40 minutes ago
- Time of India
‘Resume direct flights, reduce hotel tariffs to revive tourism in Kashmir'
Srinagar: The travel trade industry has appealed to airlines to resume flights to Srinagar that were discontinued after the Pahalgam terror attack on April 22 so that tourism in Kashmir can revive. Tired of too many ads? go ad free now While all flights to Srinagar, Jammu and over two dozen other areas were suspended in May, as India conducted air strikes against terror hubs in Pakistan, some services including direct flights from Kolkata to Srinagar by IndiGo Airlines and Air India Express have not resumed after hostilities ceased on May 10. IndiGo has indicated that it will resume the direct flight from June 16. Last month, TOI wrote about the 'Chalo Kashmir' campaign, a strong community-tourism industry connect initiative launched by the Travel Agents' Association of India (TAAI), which handles around 4 lakh tourists from Kolkata in a year, around 40,000 of whom travel to Kashmir. Taking the campaign forward, TAAI started a new campaign called Rally for Valley to boost tourism in Kashmir. "We are in talks with the Union govt as well as airlines and hotel bodies to put a cap on tariffs that can help us shape attractive packages for tourists," said TAAI president Sunil Kumar. "As for safety, we are visiting the valley with our families. Tourists have nothing to fear. People here are among the most hospitable. This is the best time to visit the Valley," he added. Over 15 lakh tourists visited Kashmir last year. The Valley was packed with tourists again this year before the terror attack triggered mass cancellations. The downturn in tourists has hit Kashmiris hard. "In April, we were charging Rs 5,000 for a round trip to Pahalgam from Srinagar. Now we are taking tourists even for Rs 3,000," said Md Rouf, a driver. Restaurants like Lazeez, which had to turn down guests two months back, are now giving special offers to fill tables. Tired of too many ads? go ad free now "Very few rooms have been booked across several hotels. Had it not been for the terror attacks, these hotels would have been packed. These hotels should take a Covid-time-like approach and cut down on tariffs. We have set ourselves a target until Sept this year by when we intend to revive tourism back in Kashmir," said TAAI chairman (east) Anjani Dhanuka. The newly inaugurated Vande Bharat Express, travelling through the landmark Chenab Bridge, is also being promoted as a game changer. "Kolkata will host the first roadshow promoting Kashmir as a safe destination. We are also regularly updating our social media handles with snippets and current activities in popular destinations in Srinagar, Pahalgam, Jammu, Gulmarg, Sonmarg, and other places to encourage tourists from Kolkata," said Manav Soni, TAAI national committee member.
Time of India
40 minutes ago
- Time of India
Relief for Gali: HC suspends conviction, grants him bail in illegal mining case
Hyderabad: Telangana high court Wednesday suspended both the conviction and sentence of Karnataka former minister and mining baron Gali Janardhan Reddy in an illegal mining case while also giving him bail, an order that would save Gali's position as an MLA. Following the conviction and seven-year sentence imposed by a special CBI court, Gali stood disqualified as an MLA and the election authorities would have held a bypoll soon for his seat (Gangavathi). Agreeing with the arguments of the legislator's lawyer, senior counsel S Nagamuthun, that damages from the conviction were irreversible, Justice K Lakshman also ordered his release from jail with certain conditions. Gali was told not to leave the country or commit unlawful acts anywhere and to furnish two sureties worth Rs 10 lakh. He has already served half of the seven-year sentence while being a remand prisoner. Along with Gali, three other individuals – BV Srinivas Reddy (Obulapuram Mining Company MD), VD Rajagopal (former director, AP mines and geology department) and Mehfuz Ali Khan (PA to Gali) – and one entity, the company OMC, were convicted by the special CBI court last month. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Amazon's Hottest Selling Hearing Aid Is Back On Sale Oricle Hearing Aid Learn More Undo On Tuesday, apart from Gali, Justice Lakshman stayed the conviction of the entity OMC. The judge also granted bail to the other three with the same conditions. The criminal appeals of these three against their conviction will be heard on Aug 11. Srilakshmi issue to be heard on June 19 The judge also sought a counter from the CBI in the criminal revision plea filed by senior IAS officer and former AP industries secretary Y Srilakshmi and posted her case to June 19. The HC had earlier discharged her from the case but the CBI had appealed in the Supreme Court, which directed the HC to hear the CBI version also before arriving at a conclusion. On Tuesday, senior counsel P Venugopal, appearing for Srilakshmi, said she has an apprehension about Justice Lakshman hearing her revision plea in view of last year's judgment delivered by him where he had refused to quash the case against her. When CBI counsel Srinivas Kapatia sought a week's time to file their counter, the judge reminded him that the CBI could not dodge filing a counter now, saying, "You complained to the apex court about the HC not hearing your version. But here you have not filed your counter despite a three-month deadline fixed by the Supreme Court asking the HC to decide the issue." Srilakshmi had succeeded Kripanandam as industries secretary. The special court, while convicting Gali and the others, had acquitted Kripanandam as well as then industry minister Sabitha Indra Reddy in the illegal mining case.
India Gazette
an hour ago
- India Gazette
Centre reduces basic custom duty on major imported crude edible oils from 20% to 10%
New Delhi [India], June 11 (ANI): The central government on Wednesday reduced Basic Custom duty (BCD) on major imported crude edible oils from 20 per cent to 10 per cent. The Ministry of Consumer Affairs, Food and Public Distribution said in a release that the Centre has reduced the Basic Customs Duty on crude edible oils - crude sunflower, soybean, and palm oils - has been reduced from 20% to 10% resulting in the import duty differential between crude and refined edible oils from 8.75% to 19.25%. This adjustment aims to address the escalating edible oil prices resulting from the September 2024 duty hike and concurrent increases in international market prices. An advisory has been issued to edible oil associations and industry stakeholders to ensure that the full benefit of the reduced duty is passed on to consumers, the release said. It said 19.25 % duty differential between crude and refined oils will help to encourage domestic refining capacity utilization and reduce imports of refined oils. By lowering the import duty on crude oils, the government aims to reduce the landed cost and retail prices of edible oils, providing relief to consumers and helping to cool overall inflation. The reduced duty will also encourage domestic refining and maintain fair compensation for farmers. The revised duty structure will discourage the import of refined palmolein and redirect demand towards crude edible oils especially crude palm oil, thereby strengthening and revitalizing the domestic refining sector. 'This significant policy intervention not only ensures a level playing field for domestic refiners but also contributes to the stabilization of edible oil prices for Indian consumers,' a release said. A meeting with leading Edible Oil Industry Associations and industry was held under the Chairmanship of Secretary, Department of Food and Public Distribution, and advisory was issued to them to pass on the benefits from this duty reduction on to consumers. Industry stakeholders are expected to adjust the Price to Distributors (PTD) and the Maximum Retail Price (MRP) in accordance with the lower landed costs with immediate effect. The Associations have been requested to advise their members to implement immediate price reductions and share the updated brand-wise MRP sheets with the Department on a weekly basis. DFPD shared the format with edible oil industry for sharing the reduced MRP and PTD data. 'The timely transmission of this benefit to the supply chain is imperative to ensure that consumers experience a corresponding decrease in retail prices,' the release said. This decision comes after a detailed review of the sharp rise in edible oil prices following last year's duty hike. The increase led to significant inflationary pressure on consumers, with retail edible oil prices soaring and contributing to rising food inflation. (ANI)
