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LG reduces domestic TV lines, expands overseas production

LG Electronics' TV plant in Indonesia (LG Electronics)
LG Electronics' TV plant in Indonesia (LG Electronics)

LG Electronics has decided to expand its overseas production of televisions, while reducing domestic production, by relocating two manufacturing lines from South Korea to Indonesia, the company confirmed on Wednesday.

Under its strategy to tackle the stagnated demand for TVs worldwide, the Korean tech giant will move out two of its six production lines that are currently located in Gumi, North Gyeongsang Province, to Cibitung in Indonesia within the year.

Built in 1995, the Cibitung TV plant has been producing TVs, monitors and signage displays.

Starting next year, the plant will increase its production capacity by 50 percent, according to the company.

“It is part of our plan to balance the mother factory in Gumi and other global plants,” the company said in a statement. “Including the Indonesia plant, the firm will increase production in Mlawa, Poland and Reynosa and Mexicali in Mexico.”

The move is part of a larger plan to realign LG’s production strategy to be more closely aligned with shifting demand, the company further explained.

“Increasing capacity at the Indonesian site will allow LG to better supply the consumers in Asia and Australia,” an official said. “The European market will continue to be supplied by the Mlawa plant in Poland while Reynosa and Mexicali in Mexico will be the primary source of TVs for LG in North America.”

The last production relocation took place in 2015. At the time, smaller production sites in Thailand, China, Poland, Vietnam and Kazakhstan were incorporated into nearby ones.

The Gumi facility will be the control tower in strengthening LG’s global TV production capabilities, and will be in charge of producing premium TVs like rollable organic light-emitting diode TVs and ultra-thin Wallpaper TVs.

“However, there will be no artificial restructuring in the workforce of the Gumi plant,” the company said.

Less than 20 percent of the 500-strong Gumi workforce will be transferred to LG Digital Park in Pyeongtaek, Gyeonggi Province, to work on development of TV-related services.

Most of the workers will stay in Gumi for the remaining four TV lines and photovoltaic module production lines.

Earlier this month, Citizens’ Coalition for Economic Justice’s Gumi branch claimed that LG was preparing to send around 380 employees working at the Gumi TV lines to Pyeongtaek due to the reduction of manufacturing capacity.

By Song Su-hyun (song@heraldcorp.com)
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