3rd plant to strengthen local supply chain, meet rising demand for high-end home appliances
LG Electronics broke ground on its third home appliance plant in India on Thursday, investing $600 million as part of a broader push to strengthen its presence in one of the world’s fastest-growing consumer markets.
The new plant, located in Sri City, a special economic zone in the southern state of Andhra Pradesh, follows the Korean tech giant’s existing factories in the northern city of Noida and in the southern city of Pune. With the new facility, LG seeks to bolster its production capacity to supply appliances throughout India, as well as neighboring markets, including the Middle East, Bangladesh and Sri Lanka.
LG held a groundbreaking ceremony at the construction site in Sri City on Thursday. Attendees included: Nara Lokesh, minister for human resources development of Andhra Pradesh; Trumbalam Gooty Gharath, minister of industry and commerce of Andhra Pradesh; Lyu Jae-cheol, president of LG Electronics’ Home Appliance Solution Division; Lee Jae-sung, head of LG’s Eco Solution Division; and Jeon Hong-ju, managing director of LG India.
The Sri City facility will spread across 1 million square meters, with a total floor area of 220,000 square meters. When up and running, the plant will have the annual capacity to produce 800,000 refrigerators, 850,000 washing machines, 1.5 million air conditioners and 2 million air conditioner compressors.
Production is expected to begin at the end of next year, starting with air conditioners, followed by washing machines, refrigerators and compressors through 2029.
Once the new site becomes operational, LG’s combined annual capacity in India will rise to 2 million televisions, 3.6 million refrigerators, 3.75 million washing machines and 4.7 million air conditioners.
"The construction of Sri City plant is a milestone that signifies LG Electronics' determination to become India's true national brand," said Lyu. "With innovative products produced through a stronger local supply chain, we will further solidify our position as India's top home appliance brand."
LG Electronics has been eyeing India as a key growth driver, as part of the tech giant’s focus on the Global South, which also includes Latin America, the Middle East, Africa and Asia, for expansion and new business opportunities.
The company said India's current household penetration rate for washing machines is at 30 percent and for air conditioners at just 10 percent, suggesting major growth opportunities. The Sri City facility, along with its two existing plants, would be able to meet the fast-rising demand of premium appliances, the company explained.
The new facility will mainly produce high-end lines, such as French door refrigerators and front-loading washing machines. LG has already introduced India-specific models, such as convertible refrigerators tailored for vegetarian diets and washing machines with a dedicated cycle for traditional clothing like sarees.
The move builds on the tech giant's nearly three-decade presence in India, entering the market with its first plant in Noida in 1997, followed by a second facility in Pune.
As part of the company's India push, LG Group Chairman Koo Kwang-mo visited India in February to inspect its manufacturing facilities and R&D center.
“The next few years are critical in determining how we can differentiate ourselves and stay ahead of competitors in the Indian market. Now is the golden time to secure sustainable leadership,” Koo was quoted as saying during his visit.
LG is also seeking an initial public offering for its Indian unit this year, in a bid to tap into the country's bustling capital market. The IPO, which was valued at approximately $1.5 billion, was initially expected to be in May, but it has reportedly been delayed due to market volatility sparked by US tariff uncertainty.
By Ahn Sung-mi (sahn@heraldcorp.com)
