LG to Shift Capital Goods Production from Korea to India

Korean multinational LG Electronics plans to move the production of certain capital goods, i.e. the equipment used for building factories for electronics, displays, and high-tech components, from its facilities in Korea, China, and Vietnam to India.

Such a decision is in line with LG’s strategy of widening its manufacturing presence in India and intensifying the local production capability as a result of the supply chain diversification of global technology firms in response to the rise of geopolitical and trade uncertainties.

Meanwhile, LG Corp, the holding company of the LG Group, has made public the plan of ₹1,000 crore investments to launch a new global research and development (R&D) centre in Noida. Besides electronics and technology design innovation, the centre is also targeted to generate near about 500 highly skilled jobs.

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The statement comes after LG Electronics India’s strong market debut. The company’s shares skyrocketed by more than 50% on listing, raising the company’s market value to $13.07 billion (₹1.15 lakh crore) - a figure that is over the market capitalization of the South Korean parent.

Prabhudas Lilladher, Motilal Oswal and other brokerage firms have given a “Buy” recommendation to the stock on account of the company’s robust distribution network, value of a premium brand, and concentration of high-margin products.

The analysts are of the opinion that LG’s sustained commitment to local production and R&D will be a factor to its dominance in the Indian market for consumer electronics and appliances which is expanding rapidly and is expected to grow at 14% CAGR from 2024 to ​‍​‌‍​‍‌2029.