South Korean manufacturer, LG Electronics Inc. will relocates its television (TV) production lines to Indonesia, as part of the global production efficiency amid the COVID-10 pandemic - Photo by the Company

JAKARTA (TheInsiderStories) – South Korean manufacturer, LG Electronics Inc., will relocates its television (TV) production lines to Indonesia, as part of the global production efficiency amid the COVID-10 pandemic. The six production lines at its TV plant in Gumi, some 260 kilometers south of Seoul, will be moved to its factory in Cibitung, within this year at the earliest.

“When many other manufacturers are cutting back, LG is expanding its TV business with an eye on further diversifying its production footprint and stepping up capacity. The key component of this strategy will be LG’ Cibitung facility in Indonesia which will become the company’ new regional hub,” the company announced today (05/20).

It said, the move is part of a larger picture to realign LG’ production strategy to be more closely aligned with shifting demand. Increasing capacity at the Indonesian site will allow the company to better supply consumers in Asia and Australia. The greater 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.

Established in 1995, the Cibitung plant will see its annual production capacity increase by 50 percent after realignments are completed, said LG. In the first quarter of 2020, the producer’ TV business saw operating income of 326 billion Won (US$250.86 million), a rise of 31.7 percent from the year prior, for the first quarter.

Since last year, President Joko Widodo invited South Korean companies to invest in Indonesia. In the last year meeting, Pohang Iron and Steel Company (POSCO) promised to be investing back in Indonesia worth of $4 billion to helped the country’ intention to produce 10 million tons of steel through PT Krakatau Posco, a joint venture company with PT Krakatau Steel Tbk (IDX: KRAS) in Cilegon, West Java.

The target its expecting to realize by 2025. POSCO wants to develop products into hot rolled coils (HRC) and cold rolled coil (CRC) in the new plant. Starting next year, the manufacturer plans to start marketing 750,000 tons of HRC steel products, while CRC products are said to be in talks with its local partner.

Then, during his visit to South Korea, industry minister Agus Gumiwang, said that LG Chemical has expressed its interest to build an integrated battery factory in Indonesia, includes a cell battery factory, battery modules, to battery recycling facilities. At the meeting, he revealed the chemical producer is committed to invests around $2.3 billion.

He suggested the company chose Surabaya in East Java as the area to be tested using motorcycles have a battery made by LG Chemical. While, SK Group was enthusiastic about investing in the industrial sector. He also hope that the conglomeration firm can develop the petrochemical industry in Indonesia to reduce import.

Nearly six million tons of petrochemical raw material are absorbed by the domestic market, while the supply of domestic production is only able to meet 2 million tons, he adds. At present, SK Group is engaged in three business groups, namely energy and chemicals (45 percent), communications and information technology and semiconductor (37 percent), and services and logistics (18 percent).

While, Hyundai Motor Co., is expecting to invest around $1 billion for the regarding the electric vehicle (EV) project located in Karawang, West Java) at The land around 600 hectares. Initially the car manufacturer will invest around $269 million. Other firms has invested in the country are, E1 Corp joined with local gas producer PT Pertagas. Both parties has beeninvested in natural gas processing company with total amount $156 billion in Palembang, South Sumatra.

Then, Samsung Electronics investing $146 billion in Bekasi, West Java and Samtan Gas joint with PT Pertamina invests $135 billion on gas processing located in South Sumatra. Furthermore, Krakatau Posco Power invested $123 billion in the power generation industry in Cilegon, Banten while Win Textile buried funds worth of $77 billion to work on the textile industry in Purwakarta, West Java.

In addition, LG Electronics spent $60 billion in Bekasi, West Java and Tangerang, Banten and  Cheil Jedang build chemical plant with costs $57 billion in Pasuruan, East Java. Beside these ten major companies, there are hundreds of other Korean companies in Indonesia.

Korean companies in Indonesia run industries in various fields ranging from minerals, textiles, telecommunications, machinery, automotive, electronics and others.

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Written by Staff Editor, Email: theinsiderstories@gmail.com