Groundbreaking Ceremony for New Factory in Sri City
$600 Million Investment, 220,000 Square Meters Facility
Annual Production Capacity of 800,000 Refrigerators
Air Conditioner Production to Begin at End of Next Year, Sequential Expansion Planned
Securing Production Base for South Asian Countries
Developing Products Tailored to the Local Market
LG Electronics is building a new home appliance factory in Sri City, Andhra Pradesh, in southern India. This will be its third production base in India, following Noida and Pune.
On May 8 (local time), LG Electronics held a groundbreaking ceremony for the new factory in Sri City, marking the official start of its expanded local production. The event was attended by Ryu Jaecheol, President of the Home Appliance & Air Solution Company; Lee Jaesung, Executive Vice President of the Energy Solution Company; and Jeon Hongjoo, Managing Director of LG Electronics India. From the Indian side, Nara Lokesh, Minister of Human Resource Development, and Tummala Gouthu Bharat, Minister of Industries, were present, reaffirming their commitment to cooperation.
The new Sri City plant will cover a land area of 1,000,000 square meters, with a total building area of 220,000 square meters. LG Electronics plans to invest a total of $600 million, or approximately 839.1 billion Korean won, to sequentially establish large-scale production lines. Once completed, the factory will have the capacity to produce 800,000 refrigerators, 850,000 washing machines, 1.5 million air conditioners, and 2 million compressors for air conditioners annually. Air conditioner production will begin first at the end of 2026, with production lines for washing machines, refrigerators, and compressors to be launched sequentially by 2029.
On the same day, LG Electronics CEO Cho Jooan shared on his social media, "LG Electronics recognizes India's tremendous potential and is committed to contributing to its development. Through continuous investment in manufacturing, innovation, and talent development, we are proud to be part of India's journey to become a key pillar of the global economy."
Jeon Hongjoo, Managing Director of LG Electronics India, also referenced his February op-ed in an Indian media outlet, "Making in India for the world," stating, "India will become the world's third-largest economy by 2027. We are honored to be part of this transformation."
A bird's-eye view of the LG Electronics home appliance factory to be built in Sri City, India. Photo by LG Electronics
With the construction of this new factory, LG Electronics will secure a new production hub not only for India but also for neighboring South Asian countries such as the Middle East, Bangladesh, and Sri Lanka. The company expects the Sri City plant to become a key base for reliably supplying home appliances throughout India, as well as to emerging markets in Central and South America and Africa.
The reason LG Electronics is expanding production in India is to respond to rapidly growing local demand. India currently has the largest population in the world and is experiencing GDP growth at more than twice the global average. LG Electronics believes there is still significant growth potential, as the penetration rate for washing machines is about 30% and for air conditioners is about 10%. The company determined that the existing Noida and Pune plants alone would not be sufficient to meet future demand, leading to the additional investment in Sri City.
The company is also developing products tailored to the local market. LG Electronics has received positive feedback from Indian consumers for its "convertible refrigerator," which allows the freezer compartment to be converted into a refrigerator, catering to India's predominantly vegetarian diet. Additionally, the company has introduced a special washing machine cycle designed for delicate fabrics, such as the traditional Indian sari, continuing to develop technologies that suit the lifestyles of Indian consumers.
The company has also established a robust sales and after-sales service network. Currently, LG Electronics operates about 700 official stores and 900 service centers across India, and has set up call centers that offer consultations in 12 regional Indian languages. By localizing everything from product sales to after-sales service, the company is enhancing customer trust.
President Ryu stated, "The groundbreaking of the Sri City factory is a decision that reflects LG Electronics' strong commitment to becoming a household brand in India. Based on a strengthened local supply chain, we will produce innovative products and further solidify our position as India's leading home appliance brand."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
