LGE seeks expansion in air-con market
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LG Electronics, the world's top maker of consumer air conditioners, said yesterday that it will bring its leadership into the commercial market and attempt to become a leading player within five years.
The announcement came after the Korean company this month launched an independent unit in charge of air conditioner operations to bolster commercial air conditioner business.
Nho Hwan-yong, head of the new unit, said the company seeks to join the ranks of leading commercial air conditioner makers - America's Carrier and Japan's Daikin - which generate around 80 percent of their revenue from sales of commercial air conditioners. For LG, 30 percent of its sales come from the commercial sector, Nho said.
He also said his division aims to increase revenue by 10 percent in 2009, from $5 billion won in 2008, despite the economic downturn.
The company is seeking to expand into the commercial market as part of efforts to generate new revenue sources, company officials said. Yesterday, LG unveiled new air conditioner models and plans to introduce other models in overseas markets.
The company said the new models are smart enough to detect the location of users and help them sleep and study well.
The new models are able to locate a human body with a sensor and adjust wind direction and wind power according to the distance between the users and air conditioners, company officials said. It is the first time that air conditioners equipped with such a sensor have been introduced in Korea, LG said, adding that the new system saves 55 percent on power and offers twice-as-fast cooling speeds.
LG officials also claimed the new air conditioners also maintain optimum temperatures during sleep, while in case of wall-mounted air conditioners, they adjust temperatures and air flow to help improve memory and mental concentration.
Those new, high-end air conditioners are priced between 1 million won and 4 million won, LG said.
LG Electronics has separated its air-conditioner operations from Display Appliance Company, which has been renamed Home Appliance Company. The Air Conditioning Company focuses on not only residential and commercial air conditioners but solutions for home networking and building management. A team in charge of compressors - a key part of air conditioners - was also established within the division.
The creation of the new division is part of the company's organizational reshuffle carried out last month. The company merged two of its four units and created two new divisions, making five total divisions.
Yong Nam, CEO of LG Electronics, said yesterday that the company will continue to restructure its business operations.
"Shedding unprofitable businesses in slow or no growth industries, and restructuring our business models to be more "asset light" - these are important levers to help us develop a profitable growth platform for the long term", he said in a New Year's speech.
He also said LG should turn the crisis into opportunities to emerge as a stronger company.
"The global recession will further divide the winners from the losers. We must take action to make sure we emerge as one of the winners. To do this will require that we prepare now. We need to improve our cost structure and cash position, in order to be able to adapt to this challenging environment and make the necessary investments to win", he said.
By Jin Hyun-joo
_____________________
Pictures with Han Ye-seul and Song Seung-heon
The announcement came after the Korean company this month launched an independent unit in charge of air conditioner operations to bolster commercial air conditioner business.
Nho Hwan-yong, head of the new unit, said the company seeks to join the ranks of leading commercial air conditioner makers - America's Carrier and Japan's Daikin - which generate around 80 percent of their revenue from sales of commercial air conditioners. For LG, 30 percent of its sales come from the commercial sector, Nho said.
He also said his division aims to increase revenue by 10 percent in 2009, from $5 billion won in 2008, despite the economic downturn.
The company is seeking to expand into the commercial market as part of efforts to generate new revenue sources, company officials said. Yesterday, LG unveiled new air conditioner models and plans to introduce other models in overseas markets.
The company said the new models are smart enough to detect the location of users and help them sleep and study well.
The new models are able to locate a human body with a sensor and adjust wind direction and wind power according to the distance between the users and air conditioners, company officials said. It is the first time that air conditioners equipped with such a sensor have been introduced in Korea, LG said, adding that the new system saves 55 percent on power and offers twice-as-fast cooling speeds.
LG officials also claimed the new air conditioners also maintain optimum temperatures during sleep, while in case of wall-mounted air conditioners, they adjust temperatures and air flow to help improve memory and mental concentration.
Those new, high-end air conditioners are priced between 1 million won and 4 million won, LG said.
LG Electronics has separated its air-conditioner operations from Display Appliance Company, which has been renamed Home Appliance Company. The Air Conditioning Company focuses on not only residential and commercial air conditioners but solutions for home networking and building management. A team in charge of compressors - a key part of air conditioners - was also established within the division.
The creation of the new division is part of the company's organizational reshuffle carried out last month. The company merged two of its four units and created two new divisions, making five total divisions.
Yong Nam, CEO of LG Electronics, said yesterday that the company will continue to restructure its business operations.
"Shedding unprofitable businesses in slow or no growth industries, and restructuring our business models to be more "asset light" - these are important levers to help us develop a profitable growth platform for the long term", he said in a New Year's speech.
He also said LG should turn the crisis into opportunities to emerge as a stronger company.
"The global recession will further divide the winners from the losers. We must take action to make sure we emerge as one of the winners. To do this will require that we prepare now. We need to improve our cost structure and cash position, in order to be able to adapt to this challenging environment and make the necessary investments to win", he said.
By Jin Hyun-joo
_____________________
Pictures with Han Ye-seul and Song Seung-heon
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