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Dongbu Daewoo to sell Spain asset

Electronics maker’s manufacturing capacity to rise in Korea, China, Mexico

Dongbu Daewoo Electronics is moving to liquidate its assets such as land in Spain, where it used to operate a manufacturing plant, the company said.

This was in line with its plan to boost and realign its production concentration in Korea, China and Mexico, a company official said.

The planned sell-off was “under consideration for some time,” the official said.

Daewoo Electronics’ Spain manufacturing plant was built in 1998 with a capacity to produce 600,000 refrigerator units for Europe and elsewhere. 

The plant -- DEMESA -- also produced microwave ovens. 

The book value of the plant was about 5.4 billion won ($5 million), according to its audit filing in 2012.

The plant was closed down in 2012, and all the company has left in the region is its land, another company official said.

Daewoo Electronics, which was acquired by Dongbu Group a year ago, said its top priority was increasing its facility investment to upgrade and advance its manufacturing of its flagship household appliances such as washing machines and refrigerators.

It said its three main plants in Korea, China and Mexico would be upgraded to further roll out such products for export, and to strengthen its partnerships with Electrolux, GE and Siemens for original equipment manufacturing.

Korea’s third-largest home appliance maker also plans to foray into flat-panel televisions and robot vacuum cleaners this year to help regain its former glory achieved before the Asian financial crisis, when it had a competitive edge over Samsung Electronics and LG Electronics.

Dongbu Daewoo Electronics said it is steadily outselling LG and Samsung in household appliances such as refrigerators in Mexico and the Middle East.

Daewoo had been the first Korean home appliance maker to introduce washing machines and refrigerators tailored to Islamic customs, it noted.

The official also said that the company would eye stock flotation in the coming years for when the market conditions improve, noting that the company’s vice chairman Lee Jae-hyung said an initial public offering was part of its plan.

Lee told the press that it could launch an IPO in five years, which was part of a deal with its financial investors when Dongbu Group acquired Daewoo Electronics in 2013, as listing on the stock market would provide an exit for the investors.

The company seeks to achieve sales of around 1.9 trillion won this year, up from 1.7 trillion won last year.

By Park Hyong-ki
(hkp@heraldcorp.com)