Has Koo Bon-joon found way to resuscitate LG?

By Kim Yoo-chul

PAJU, Gyeonggi Province ― LG Group is trying hard to find a breakthrough in its critical but stalling display-related businesses amid a more uncertain outlook.

LG Group has LG Electronics, LG Display, LG Chem and LG Innotek as key affiliates handling television and value-added, embedded light emitting diode (LED) applications.

Since early last year, however, it has been facing the challenge of taking a ``first-mover’’ advantage in the next-generation consumer display products such as LED-backlit LCD TVs and three dimensional (3D) televisions due to what analysts say is the lack of an integrated and customized strategy.

In 3D televisions, LG Electronics has shown a meager increase in its global share, while the group’s component-making unit LG Innotek is struggling to push its LED business, which the group has embraced as a next cash-cow.

“We have no time to lose. Time is crucial but LG has been late to respond to future markets. We need strong leadership to revive sagging momentum in the display business,’’ said a representative at LG Innotek’s new factory in Paju, north of Seoul, Tuesday.

The official, who asked not to be identified, added employees have higher expectations of LG finding new momentum since Koo Bon-joon, the brother of group Chairman Koo Bon-moo, took over as CEO of LG Electronics.

Sony recently passed LG Electronics in terms of worldwide market share for flat screen TVs, according to market research firms.

In a rare move, Chairman Koo and LG Electronics CEO Koo with LG Chem CEO Kim Bahn-suk will today attend an opening ceremony for LG Innotek’s LED packaging line at its display complex.

LG Chem will also announce its plan to produce LCD glass used in digital devices.

The participation of LG Group’s family owners at the ceremony is a reflection of the conglomerate’s shift.

The company realized integration of its display business after Innotek moved its LED line, at a cost of 1.5 trillion won, to the display complex, where LG Display and LG Chem have production lines.

``We’ve secured room to strengthen the LED TV and display-related businesses, while the group’s earnings driver, the LED light bulb business, is expected to see additional momentum,’’ said an LG spokesman.

It is widely known that LG Group will set up an organic LED or OLED display joint venture to better participate in the highly-lucrative flat-screen industry, though LG officials declined to comment.

With help from LG Chem, LG Innotek and LG Display, the group’s electronics unit is planning to challenge Samsung’s lead in 3D TVs by churning out products using the relatively cheaper polarized technique.

Innotek plans to supply more LED chips, while LG Chem is set to boost its production of film material to be used in polarized 3D TVs. LG Display is ready to supply polarized 3D panels to LG Electronics, according to officials.

``LG clearly sees this capability as vital for the future success of its hardware,’’ said another LG representative at Paju.

LG Innotek dropped its plan to invite reporters to the event, citing sensitive issues, though market watchers say the cancellation is mainly due to the chairman’s hesitance to meet the media.

Koo Bon-joon has been asked to hold an early press conference to unveil LG Electronics’ updated plans for its display and handset businesses.

``We will hold a press tour of the new LED line sometime in early November,’’ said an LG Innotek spokesman.