LG Innotek Declares LED Bid
LG Innotek said Thursday it would invest more in its light-emitting diode (LED) business. To spur further growth in LEDs, the company is mulling the possibility of a fund-raising campaign that includes a stock offering.
"Sales growth of our LED business is forecast to double in the second half. Innotek plans to invest 150 billion won in our LED business by the end of next year. But that amount isn't enough," company CEO Hur Young-ho told reporters at company headquarters in Yeouido, Seoul.
LG Innotek, an electronics parts affiliate of LG Electronics, now runs a local LED plant in Gwangju, South Jeolla Province.
The comments came a day after LG Innotek reaped a record quarterly operating profit of 79.1 billion won in the second quarter out of the total sales of 952.8 billion won.
By riding on the rising demand for LEDs that are used in consumer electronics products such as TVs and cars, Innotek's LED sales rose 23 percent in the latest quarter from the previous quarter.
On the subject of possible financing plans, chief financial officer Park Hee-chang said the company is considering options to raise money as well as seeking ways to improve its financial soundness.
Innotek already has plans to issue convertible bonds and bonds with warrants in August to raise 100 billion won in total.
Hur said South Korean companies were able to maintain their price competitiveness in key markets when the dollar-won rate was moving into the mid-1,200 won range.
"Uncertainties are still high in the global economy. We need stronger U.S. consumer data and on factory production rates in China to guarantee economic recovery," he said.
Regarding additional restructuring, Hur said he would phase out money-losing businesses and invest more capital in promising sectors.
"Our task now is to have further external growth amounting to at least 3 trillion won in sales. By 2015, Innotek will reach 10 trillion won in annual sales, 10 percent of which will be operating profits," he said.
The company's clients include LG Electronics, LG Display, Nokia, Motorola and Sharp.
Hur said LG Innotek plans to increase sales to non-LG clients to 50 percent of total sales by 2012, up from 30 percent.