By Kim Yoo-chul
BERLIN ― LG Electronics is mulling the possibility to acquire healthcare-companies the business has a stronger growth potential amid an aging population.
LG, which competes with U.S.-based Whirlpool and Electrolux of Sweden to rank the top global home appliances maker has also announced a plan to reap $20 billion in appliances sales from 2015 ― the revenue scale necessary for first place.
``The healthcare business is more than attractive and has higher growth potential. LG is mulling the possibility of M&As in this sector, though nothing has been decided yet,’’ said Lee Young-ha, the head of LG’s home appliance unit, in a lunch meeting with South Korean reporters in Berlin, Germany, Friday.
LG’s home appliance division is LG Electronics’ major cash-cow amid struggles in LG’s television and handset businesses.
``Also, LG will outsource needed technologies in the healthcare business as an initial step to tap marketability,’’ added the top company executive.
Lee was at the IFA consumer electronics trade exhibition in Berlin with LG’s other top executives including LG Electronics CEO Koo Bon-joon.
The remarks come after LG Electronics identified mergers and acquisitions (M&As) as its new growth engine at least in the home appliances business.
Months ago, it bought Daewoo Entec as part of its strategy to become the world’s top-tier water treatment firm. Entec is one of South Korea’s leading sewage treatment firms.
Separately, LG said it is aiming to reap $20 billion in sales in just its home appliances business in the next four years by selling more tech-featured variants.
To match the business target, LG has more than tripled the output of its refrigerators and has been operating its newly-built washer line with an annual capacity of one million in its factory in Wroclaw, Poland.
``We will invest $34 million, additionally, by 2015 to construct additional lines,’’ Lee told reporters.
By revenue, LG also has a plan to raise its share in washers and refrigerators to 13 percent and 12.5 percent, respectively, by the end of 2015, Lee said.
As of the end of last year, LG’s share in refrigerators was 8 percent, while that of washers was between 6 to 7 percent, according to LG officials.
``By cutting manufacturing costs, further, LG hopes to recover the profitability of the home appliances business in the fourth quarter of this year, at the earliest,’’ said the executive.
In the wake of initiatives for software after Google’s acquisition of the struggling U.S.-based handset maker Motorola, Lee ruled out the possibility of developing its own platforms for appliances.
At the IFA, LG exhibited various appliances lineups that have advanced technologies and low power consumption.
``LG will release more customized such products according to the countries in the Eurozone by partnering with Europe’s major logistics and distribution channels,’’ said Lee, adding it’s been focusing more on the markets for France, Spain, Italy, as well as Germany.
Not surprisingly, the division head Lee stressed LG has been seeing some positive changes after it returned to ownership management.
Koo Bon-joon, the younger brother of LG Group Chairman Koo Bon-moo, has been the chief executive of LG Electronics because LG was eager for faster decision-making and boldness after its initial failure in the ``must-go’’ smartphone market.
``We’ve seen several changes, positively. By example, we’ve a faster decision-making processes and the new CEO is open to listen to voices from fields, unlike the past,’’ said Lee as his last remark before leaving to attend a strategic meeting with other LG executives including Bon-joon.