LG Electronics, Korea’s leading consumer electronics manufacturer, said Sunday that it plans to start a business-to-business energy consulting service next month as a new source of income.
The business will involve analyzing energy flows, including heating and air conditioning in office buildings and providing solutions for energy saving.
LG’s initiative reflects the group’s efforts to secure future growth engines and an increasing trend among local major companies such as GS Group to jumpstart renewable energy-related business with the government’s financial aid.
In Korea, a company needs the government’s approval to start an energy consulting enterprise.
The Ministry of Knowledge Economy has been shoring up the nascent industry since it made 470 companies subject to mandatory energy-saving and emission cuts regulations in late September.
The ministry announced last week a plan to raise investment in energy-saving companies, or ESCO, by nearly 18 percent to more than 600 billion won ($533.5 million) this year.
It estimates the global ESCO industry at 16 trillion won. The local market stands at slightly less than 200 billion won for now, but shows growth potential in a long-term, officials said.
LG expects synergy effects when the new venture consolidates other energy-related projects such as air conditioners, solar cells and light-emitting diodes, as it strives to get back on its feet after last year’s huge losses resulting from sagging handset sales.
“Energy consulting is a business-to-business industry thus takes more time to create a market in full gear,” a company official said. “The air conditioning and energy solution department is closely looking into the process.”
The firm is also accelerating moves to put in place its water treatment system project ― another growth engine ― some time next year, it added.
By Shin Hyon-hee (email@example.com