By Kim Yoo-chul
LAS VEGAS - LG Display, the world’s largest producer of flat screens used in televisions, computers and phones, admits 2011 was a letdown in terms of profit.
But the company’s new CEO Han Sang-beom likes his chances for a turnaround this year, with the prices of liquid crystal displays (LCDs) expected to stabilize in the coming months and the demand for large televisions and other LCD-based products likely picking up ahead of the London Olympics.
``The demand for televisions will rise due to major sporting events like the Olympics and Euro 2012,’’ he said at the sidelines of the Consumer Electronics Show in Las Vegas.
Han, who recently replaced Kwon Young-soo at the helm, conceded that the company ultimately failed to achieve a turnaround in profit last year but stressed that things can only get better.
He anticipates LCD prices will start to rebound in the latter part of the first quarter and also expects a boost from television makers looking to restock inventories ahead of new product announcements, which could be aplenty this year.
LCD prices are a key indicator for LG Display’s business health. Traditionally, the second half of the year is stronger for LCD makers, due to stronger demands during the yearend holiday season.
However, heightened uncertainty surrounding the European debt crisis and other global economic issues dampened shopping spirits this time around.
``Market conditions have been improving from what we forecast in October. LG Display is currently running at full capacity,’’ said Han, denying rumors that the company is planning to issue new shares.
``We will have no big problems because we still have a good cash flow, thanks to our extended period of lucrative business.’’
LG Display, which competes with cross-town rival Samsung Electronics for supremacy in LCDs, posted its biggest-ever quarterly loss in the third quarter of last year, its fourth straight quarter in the red.
It plans to invest about 4 trillion won this year and Han said the company has already approved increased spending on its new organic light-emitting diode (OLED) business.
``What we should do is to prepare for the future. We will also increase investment for touch-screen panels to boost our competitiveness in display making,’’ Han said.
Although LG Display will start shipping its OLED screens for 55-inch television units from the latter half of this year as scheduled, the CEO admitted that the OLED market won’t be firing on all cylinders until at least three years later.
OLED televisions are thinner and brighter than conventional LCD and plasma-based models. However, consumers have been repelled by their lavish price tags.
LG Electronics’ 55-inch OLED television, which will use LG Display’s screens, will be sold at around $8,000.
Han was rather coy about the challenges the company face in China. LG Display is still unsure on whether to build a new, cutting-edge LCD plant from scratch in southern China and Han gave no hint as to where internal talks are headed.
The company’s chief financial officer had told analysts earlier that it’s considering scrapping plans for the 4 trillion won factory in China, despite the trouble it took to receive Beijing’s approval to build the facility.
LG Display has been experiencing labor unrest in its existing Chinese factory. Thousands of its Chinese employees returned to work after a three-day strike after management promised to double their yearend bonuses. Workers at the plant reportedly receive an average monthly salary of around $220.
China Labor Watch said that workers at an auto parts factory owned by Japanese firm Ahresty had also walked off the job.
Chinese workers have shown an increased willingness to strike in recent months, with many complaining of low salaries, wage cuts and poor working conditions.
``LG will try its best not to get involved in these developments. I fully acknowledge the big cultural differences between China and Korea,’’ Han said.