LG plans to make India export hub amid Korea, China tensions2 min read . Updated: 18 Apr 2017, 05:36 PM IST
LG Electronics India MD Ki Wan Kim says one of the main reasons for the company to explore making India an export hub is due to tension prevailing between South Korea and China
New Delhi: South Korean consumer electronics giant LG is looking at making India its export hub, banking on good ties between the two countries at a time when its overseas shipments from China are declining.
According to LG Electronics India Managing Director Ki Wan Kim, one of the main reasons for the company to look at making India an export hub is due to tension prevailing between South Korea and China.
LG, which has two manufacturing units in India, exports to the Middle East and countries in the eastern coast of African continent. Around 10% of sales of the company’s Indian arm—LG Electronics India (LGEI), are currently from exports. Last year, LGEI had sales of Rs22,000 crore. “On the other hand ties between South Korea and India have improved. All Korean (companies) have started to see India as a strategically important manufacturing base not only for India but for other areas," Wan said.
When asked if LG is scouting for more global markets for exports from India, he replied in the affirmative saying it is looking for countries where there is little or no manufacturing. Earlier, LG used to serve such markets from China but “it is declining gradually", Wan added. “Already we are exporting from Noida and Pune to Middle East mainly in Saudi and Iran and African countries on (the eastern coast of the continent)," he said.
Another major factor for seeing India as a major hub for exports is that the country is becoming more competitive economically and there will be secured and transparent taxation regime with the expected implementation of goods and services tax (GST). “India is becoming more competitive economically. With GST coming up, its secured and transparent taxation regime along with a stable political system would help in project as a bigger manufacturing hub," Wan added.
LG can increase its manufacturing capacity whenever required, he said. He said the company, which is celebrating its 20 years of operations in India this year, has witnessed very high growth rate in the last couple of years. India is among the top five global markets for LG in consumer durables category with the USA, Korea, Brazil and Russia.
Reflecting on the company’s two decades of journey in India, Wan said: “It is an achievement in itself. We have seen many brands come and go in India. Not only have we sustained but we have become number one ." On LG’s success in India, he said: “We have been able to serve the needs of different consumers here. India is not one country as far as consumer requirements are concerned." The demand from consumers from South India is different from those of the North or the East, he said, adding, “therefore we have a strong local R&D team, which helps in identifying the specific needs of consumers so that we can deliver it to them."