LG budgets Bt600m to raise capacity at Rayong plant
LG Electronics (Thailand), the local unit of the South Korean manufacturer of electric appliances, has earmarked Bt1.8 billion for capital expenditures this year, of which Bt600 million is for increasing production capacity and efficiency at its facilitie
The lion’s share, about Bt1.2 billion, is for marketing.
Deputy managing director Alongkorn Chujit said yesterday that about Bt150 million of the total capex budget would go its air-conditioner plant, of which half would be spent on increasing production capacity for its compressors and half for increasing production efficiency, especially for its inverter models.
The remaining Bt450 million will be used to increase production efficiency of LG’s other home-appliance and entertainment products.
"We will continue to inject more capital in air-conditioners this year. Last year spent we about Bt150 million on expanding our air-conditioner plant in Rayong from 1.5 million units per year to 2 million units, to cash in on rising demand," he said.
Demand for air-conditioners is expected to rebound strongly this year, up 10 per cent to 1.1 million units, he said.
The unstable weather and massive flood last year seriously affected demand for air-conditioners, with sales dropping 10 per cent to 1 million units.
Inverter-type air-conditioners are expected to increase significantly this year from 15 per cent to 25 per cent of the overall air-conditioner market. Instead of running at a standard fixed speed like a conventional unit, inverter air-conditioners increase or decrease power consumption as it is needed.
This year, 20 per cent of demand for air-conditioners will come from new housing and condominium projects, while 70 per cent will come from households that buy a second air-conditioner and 10 per cent from product replacements.
Inverter models
Sales of inverter models soared by 30 per cent last year as consumers became more conscious of energy savings.
"Demand for inverter air-conditioners is expected to rise by 50-60 per cent this year," he added.
Thunyachate Ekvetchavit, marketing director, said 16 air-conditioner models were unveiled by the company at the beginning of this month, of which about half were the inverter type.
LG Electronics yesterday introduced the LG Inverter V Plasmaster, an air-conditioner equipped with LG’s latest ionising technology called Plasmaster, enabling advanced skincare function and enhanced air purification.
"With the launch of new air-conditioners, we aim to increase LG’s share of the overall market from 18 per cent last year to about 20 per cent this year. We also want to strengthen our leading share in the local segment of air-conditioners with inverter technology and to increase our share in the segment from currently 24 per cent to 25 per cent by the end of this year," he said.
LG Electronics aims to drive its domestic sales up 20 per cent to Bt24 billion this year.
