LG Electronics has started building a manufacturing plant worth $600 million in southeastern India. This will be its third plant in the country. The company aims to strengthen its position in the Global South, especially as global trade tensions continue to grow, particularly with the United States.
The company announced on Friday that it will have a groundbreaking ceremony at the location of its new home appliance factory in Sri City, Andhra Pradesh.
The new plant will be added to LG’s existing factories in Noida and Pune. This shows LG’s goal of strengthening its position as a major brand in India.
The event was attended by LG Electronics Home Appliance & Air Solution Company President Lyu Jae-cheol, LG Electronics’ ES Division Head Lee Jae-sung, and local government officials.
The facility will cover 1 million square meters of land (about 10.7 million square feet) and have a building area of 220,000 square meters.
Once up and running, the plant will produce 800,000 refrigerators, 850,000 washing machines, 1.5 million air conditioners, and 2 million compressors yearly.
LG plans to start making air conditioners by the end of 2026. Over the next few years, it will gradually begin producing washing machines, refrigerators, and compressors, with all production lines in place by 2029.
The project is part of LG’s larger plan to expand its presence in growing Asian, Latin American, Middle East, and African markets.
India, the world’s most populous country and one of the fastest-growing economies, is at the heart of this effort.
Even though President Donald Trump imposed a 26 percent tariff on goods from India, LG sees India’s fast-growing market as a long-term opportunity.
“Washing machines and air conditioners have a penetration rate of only about 30 percent and 10 percent, respectively, in the Indian market,” an LG official said. “With fast economic growth, demand for premium appliances is increasing, and our existing factories alone may not be enough to meet that demand.”
Since establishing its Indian subsidiary in 1997, LG has steadily built its presence there.
According to research firm Redseer Strategy Consultants, LG was the leader in the Indian market in the first half of last year. It had a 28.7% share of the refrigerator market, 33.5% of washing machines, 19.4% of air conditioners, and 25.8% of televisions.
“LG recognizes India’s immense potential and remains committed to its growth,” LG Electronics CEO Cho Joo-wan said Thursday on his social media account. “We are proud to contribute to India’s journey toward becoming a key pillar of the global economy through ongoing investments in manufacturing, innovation and talent development.”
Products made at the Sri City plant will be sold all over India and exported to nearby countries like Bangladesh, Sri Lanka, and parts of the Middle East.
The site is located near Chennai on the southeastern coast, providing better shipping options for exports and easier access to southern India than LG’s existing plants in Noida and Pune.
Reuters reported last month that LG has filed a lawsuit against the Indian government, challenging new rules that have significantly raised the costs of recycling electronic waste.
The rules, which were introduced in September 2024, set minimum price standards for recycling electronic waste. This has caused manufacturers’ compliance costs to increase by three to six times.
High employee turnover and strong labor unions also pose potential risks.
In February, more than 500 workers held a sit-in protest after three employees were disciplined. In response, Samsung announced a 170 billion won ($121 million) investment and said it would hire about 100 more workers.
On December 6 last year, LG submitted a draft prospectus to the Securities and Exchange Board of India for an initial public offering (IPO) of its Indian operations.
“We would not rush to list the company and would determine the IPO timing after carefully reviewing market conditions and the potential synergy benefits,” the company said during an earnings call on April 24.
Read also – Salesforce Launches $500M AI Initiative in Saudi Arabia with Key New Hire
