A model shows Samsung Electronics’ 65-inch light-emitting diode (LED)-backlit liquid crystal display (LCD) television.
/ Courtesy of Samsung Electronics
Samsung Electronics and LG Electronics, Korea’s two technology giants, are spending heavily to strengthen their positions in their major markets and get out of the gate early in emerging businesses.
LG, desperate to close the gap on its larger domestic rival, is understandably more eager to tout its investment plans, which includes rebuilding the core of its home appliances business.
The company’s main focus is to strengthen its European business network and manufacturing units, which it believes will help enhance its presence in lucrative regional markets, reduce production and logistics costs, improve its relationship with major clients and also expand its reach to North African countries.
LG will spend $70 million to establish production facilities in Wroclaw, Poland, through 2015, with the immediate focus put on improving manufacturing capacity in washing machines.
``About $12 million of the budget will be used next year to construct a new line that will produce 700,000 washers annually,’’ said LG spokesman Choi Joon-hyuck.
``The investment plan will allow us to penetrate further into the European market for washers and elevate our presence as a major provider of home appliance products. The concerns over the economic troubles in southern Europe have eased considerably and we believe this is the right time to flex our muscles.’’
Poland will be the latest manufacturing venue for LG’s washing machines, following Korea, China, Thailand, Vietnam, India, Russia and Kazakhstan.
Europe is becoming increasingly important for the company, as it enjoys rising sales in the washer markets of France, Portugal, Greece and the Czech Republic.
Manufacturing these products in Poland gives LG increased flexibility in responding to the needs of European consumers and provide them a more diversified product lineup, company officials said.
``Our goal is to achieve a 10 percent market share in the European washer market by 2012. This would be enough to make us a top-three brand,’’ said Choi.
Refrigerators are another important part of LG’s renewed focus on its home appliances business.
The company will invest $24 million through 2012 to improve production of its refrigerators, targeting an annual manufacturing capacity of 1.4 million from the current 300,000.
``Our target for the European refrigerator market is basically identical with washers _ achieving a 10 percent share. The Wroclaw site will serve as a central part in this,’’ said Choi.
The remaining $34 million of LG’s $70 million budget for the Poland manufacturing site will also be predominantly spent on its businesses for washing machines and refrigerators, Choi said.
``Wroclaw will be our new European technology base and share significance with London, where our European headquarters are housed. The priority of our European business will be flat-screen televisions, refrigerators and washing machines,’’ he said.
Samsung aims to build on 3D TV leadership
Samsung, the world’s largest maker of flat-screen televisions, is vowing to build on its early lead in the market for three-dimensional (3D)-enabled televisions, and Europe, along with the North American markets, will obviously be critical.
Samsung said its global sales of 3D televisions exceeded 1 million, about six months after they first appeared on shelves in March.
Stereoscopic 3D televisions are considered the natural successor to the flat-screen liquid crystal display (LCD) televisions of today, and Samsung is desperate to gain a reputation as the major player in the new market.
The company is partnering with a wealth of entertainment companies to provide content for their upcoming sets and also spending heavily to improve its software capabilities to enhance the functions and features of its products.
Samsung is off to a fast start in the 3D television markets of North America and the European demand its beginning to pick up as well, company officials said.
``North America currently accounts for 66 percent of the global market in 3D televisions at the moment, with the projected global sales are expected to reach 3.4 million for this year. More of the growth is to come from Europe, and we will be aggressive to jump on this opportunity,’’ said Samsung spokesman Kim Se-hun.
``We are planning to strengthen our marketing campaigns in Europe, including a variety of programs involving the major retail outlets of electronics products. The `Samsung Apps Contests’ will also be held in Britain, France and Germany during October, which are part of our efforts to build a developers’ network for data-enabled household and mobile devices,’’ he said.
Samsung is expected to announce new business plans for 3D televisions at this year’s IFA trade fair in Germany, where Yoon Boo-keun, who heads the company’s television business, will be taking questions from reporters.
IFA rivals the Las Vegas-based Consumer Electronics Show (CES) as the world’s largest consumer electronics exhibition, and Samsung and LG are two of the world’s leading technology companies that will be unveiling their latest products and business strategies there.
IFA will run from Sept. 3 to 8 at the ``Berlin Exhibition Grounds’’ in Berlin, Germany.