By Kim Yoo-chul
LG Electronics said Tuesday it will be earning $10 billion won in revenue from selling commercial air conditioners alone by 2020, with a significant part of the growth coming from developing economies.
The company has been carving out a strong position in air conditioners and cooling systems used in buildings, although it trails Western brands in the household market.
Demand for commercial air conditioners is dependent on the health of the overall economic climate, which means that the decline in construction sector activity has been hurting LG’s business in the domestic market. The financial crisis in Europe and a slowing China are also challenges for LG, but the company is confident that it can compensate by expanding its presence in developing nations.
“Economic troubles in Europe, which is LG’s biggest market, clearly hurt, while the economic slowdown in China and Korea is also dragging us down. Despite these difficulties, we have been maintaining our pace in growth and we remain positive about our mid- to long term business prospects,” said Lee Kam-kyu, head of LG’s commercial air conditioner division, in a news conference Tuesday.
Last year, LG Electronics reaped about 4.6 trillion won revenue from its air conditioning business, with commercial products and systems accounting for 40 percent of that total.
“Over the last three years, LG’s commercial air conditioning business has grown by 15 percent annually. It’s achievable for LG to reap at least $10 billion revenue from that segment by 2020,” Lee said.
Lee admitted that the outlook for Korea was murky as the construction and real estate sectors remain in a coma.
“That’s why we are eyeing new markets such as convenience stores. New systems with greater energy efficiency will help us secure our bottom line and see new business chances,” Lee said.
LG has high hopes for its newest commercial air conditioner, the MultiV Super 4. It features an improved compressor that allows the product to be significantly more energy efficient than older models, the company claims.
yckim@koreatimes.co.kr
“LG Electronics has steadily been investing in compressor technologies. That’s why LG Electronics is leading in the local air-conditioning market,” Lee said.