LG Electronics India Invests Rs.300 Crore For Domestic Production Of AC Components Under PLI Program
LG Electronics India has invested nearly Rs 300 crore in air-conditioner components under the Indian government's production-linked incentive (PLI) programme, with Rs 100 crore dedicated to compressor manufacturing. LG has become the first company in the world to manufacture its own compressors.
As a result of this investment in the component ecosystem, LG has been able to locally source more than 65% of the components required for producing their air-conditioners in India, compared to only 40-45% a few months ago.
On Monday, LG inaugurated a compressor plant at their Greater Noida manufacturing facility, which will produce dual inverter compressors with a yearly capacity of over one million units. Other components, such as condensers and evaporators, are already being produced under the PLI programme.
According to Kulbhushan Bhardwaj, LG India's business head of air-conditioners, the compressor plant completes the entire INR 300 crore investment made under the PLI program.
LG India used to import compressors from their Thailand facility, according to Kulbhushan Bhardwaj. However, with the establishment of the compressor plant, LG will manufacture compressors for their Indian operations and may even export to other LG operations and sell compressors to other brands in the future.
Air conditioner sales account for 20-25% of LG India's revenue, and the company holds approximately 22% of the market share. LG India sold 1.2 million air conditioner units the previous year, and the company expects to sell 1.5 million units this year.