No Longer Selling Smartphones, LG Focuses On IoT Production

LG illustration (intermediate doc.)

JAKARTA - LG Electronics Inc. quickly turned his smartphone manufacturing line into a home appliance manufacturing facility. This change follows LG's decision to withdraw from the cellular business.

LG said the Brazilian government last month approved plans to expand its Manaus plant in Amazonas in a bid to divert production lines from its Taubate plant on the east coast.

When the $62 million project is completed, LG Electronics will have a new production line for laptops and monitors at the Manaus plant. The South Korean tech giant said all manufacturing in Brazil would be consolidated in Manaus.

Started in 1995, the Manaus factory was originally established to manufacture TVs, microwave ovens and DVD players, with air conditioning added in 2001. The Taubate factory has been in operation since 2005, manufacturing mobile phones, monitors and laptops.

The latest relocation follows LG's move in April to convert its smartphone line at its Haiphong plant to make home appliances in northern Vietnam.

LG previously announced it would be exiting the mobile business on July 31 after years of losses. Since then, the company has sought to relocate its mobile workforce and resources to the home appliance business.

Demand for LG's premium home appliances has surged due to the stay-at-home trend triggered by the pandemic.

LG's home appliances and air solutions (H&A) unit in the first quarter posted revenue of 6.7 trillion won and operating profit of 919.9 billion won, both of which were the most for a quarterly performance.

Its home appliance production line utilization rate hit a five-year high in the first quarter of this year, according to LG. The refrigerator production rate reached 153.2 percent, while the production facilities for air conditioners and washing machines reached 142.8 percent and 114.4 percent, respectively.

This means that the company runs its production line fully and also operates the facility with extra work. The utilization rate of LG's washing machine and refrigerator lines was around 80 percent in the second quarter of last year.