 Workers assemble LCD TV sets at LG Electronics' Wroclaw factory, which opened Wednesday. The firm is to produce 3 million LCD panels and 2.4 million TV sets every year from the site to serve the European market. / Courtesy of LG Electronics |
By Cho Jin-seo
Staff Reporter
LG Group opened its liquid-crystal display (LCD) manufacturing cluster in Poland on Wednesday, which will act as one of the three global supply points along with its factories in Paju, South Korea, and in Nanjing, China.
The Wroclaw facility is to produce 3 million LCD modules and 2.4 million TV sets, which are built on those modules, every year for European consumers who account for a little more than one third of the global market.
Four LG affiliates and three partner companies have spent a total of $538 million (501 billion won) in the Polish project. Another $547 million (510 billion won) are to be injected into the 1.4-square kilometers site by 2011, to expand the production capacity to 11 million modules and 10 million TV sets by 2011, LG said.
Wednesday's opening ceremony was attended by some 500 executives and guests, including LG Group Chairman Koo Bon-moo, LG Electronics CEO Nam Yong, LG.Philips CEO Kwon Young-soo, and Elzbieta Dorota Wilczynska, the Polish deputy minister of economy.
``As the demand for LCD TVs is increasing more rapidly in Europe than any other region, the Poland cluster will play a core part in LG's overall LCD-related businesses,'' Nam said during his speech. ``Now, with five major LCD manufacturing strongholds strategically placed around the globe, we are in a better position to achieve our goal of being the industry's leader."
LG said it chose Poland for the country's advantageous geographic location, competitive workforce, established infrastructure and the support from the Polish government. Approximately 4,200 jobs were created in the region with the opening of the LG cluster, the group said.
``We are proud that this is currently the largest LCD manufacturing center in Europe. Thanks to LG's investment, other foreign companies have also decided to build their factories in our community," said Ryszard Pacholik, mayor of Kobierzyce Commune where the factories are located.
The Poland cluster finishes up LG's global LCD supply chain. The panels are first manufactured in LG.Philips' factory in Paju, South Korea. They are then shipped to one of the three module factories in Paju, Nanjing and Wroclaw where they are assembled with backlights and other parts.
The modules are then sold to TV and monitor companies such as LG Electronics, Philips and Toshiba, all of which are operating TV factories in nearby Eastern European nations.
LG also said the complex will incorporate a one-stop manufacturing system, allowing LCD products and components to be produced and assembled in a single location. Raw materials for LCD panels will be supplied by LG Chem; electric parts and devices by LG Innotek; LCD modules will be made by LG.Philips LCD; and finished LCD TV sets by LG Electronics.
To the relief of LG officials, LCD panel prices have been rebounding since April. According to Display Bank, the price for panels for PC monitors is expected to continue to rise until September at the least. The research firm expected LG.Philips recent operating loss to turn into a profit from the second quarter.
Strategic Points
LG hopes that cooperation among its three LCD clusters will create synergy in new technology development, purchasing system integration and talent sharing.
The Paju cluster is home to LG.Philips LCD and is the largest digital display cluster in the world, covering 4.5 square kilometers in total on the northern outskirt of Seoul.
The Nanjing display complex covers 2 square kilometers in total, including LG.Philips LCD's first overseas LCD module plant and plasma display module and TV set plants of LG Electronics.
LG.Philips LCD is a joint venture between LG Electronics and Philips. Toshiba also has a 19.9 percent stake in LG.Philips' subsidiary in Poland as they seek partnership in the display sector.
indizio@koreatimes.co.kr
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