“India is no longer a country with the best cost competitiveness, but rather a best capability country,” Cho told ET. “In fact, both cost competitiveness and capabilities are co-existing — best cost for hardware and best capability for software.” He has been familiar with the South Korean giant’s India business from the early days, including when it set up the first Greater Noida unit in 1998.
Plan to Double R&D StrengthCurrently the country’s largest home appliance and television manufacturer, it operates two factories and is building a third with an investment of Rs 5,001 crore in Andhra Pradesh to produce refrigerators, washing machines, ACs and components.LG wants to set up more factories in India, considering that the country with its fast-growing GDP is not far from the “inflection point which will lead to explosive demand for appliances” and could cause some “shortages”, Cho said. Government schemes like production-linked incentives would help its efforts, he said.
Cho, who has been with LG for 38 years now, said the company views India as a research and development hub and wants to utilise the country’s young talent to develop technologies for semiconductors and robots. The company will double its R&D manpower in India by 2027, he said. LG at present employs around 500 people in India for R&D.Emulating India ModelThe company wants to leverage its India learnings to set up similar factories elsewhere in the Global South, which LG recently identified as its next big growth market. “It’s amazing to see Indian subsidiary’s performance in the last three decades. We would like to replicate the best practice from India in other emerging markets,” he said.LG’s local subsidiary, LG Electronics India Ltd, listed on Indian stock exchanges Tuesday, after an initial public offering where the parent sold a 15% stake. The IPO was subscribed 54 times, generating around $1.31 billion (Rs 11,605 crore). Cho was in India for the listing. The shares ended the first day’s trading on the BSE at Rs 1,689.40, up nearly 50% from the IPO price, giving the company a market capitalisation of about Rs 1.15 lakh crore.
“The Indian operation is selfsufficient with sky the limit. We want LG India to be a true national corporation of India and replicate the parent’s success,” said Cho. The India IPO, the first by a local unit anywhere for LG, was the first initiative of growth in the Global South markets for the Korean company. LG India is the local market leader in washing machines, directcool and side-by-side refrigerators, 4K televisions, window inverter AC and 5-star AC.
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