LG Electronics restarts home appliance plant in Russia

LG Electronics Inc. has resumed operations at its home appliance plant in Russia amid prospects of a ceasefire between Russia and Ukraine, signaling a return of South Korea’s companies to the market after nearly three years.

Its archrival Samsung Electronics Co. is ramping up marketing activities in Moscow as it prepares to bring its Russian plant back to full operation, with ceasefire talks gaining momentum since US President Donald Trump returned to the White House in January.

LG Electronics has restarted operations at its plant in Ruza, near Moscow, where it produces TVs, refrigerators and washing machines, after receiving regulatory approval, according to Russian media reports.

It marked the first time the plant has been operational since August 2020, when production was suspended following Russia’s invasion of Ukraine six months earlier.

LG confirmed the report. “We are producing a limited quantity of washing machines and refrigerators using inventory and materials held by our Russian subsidiary,” said an LG Electronics official.

Roh Youngnam, head of LG Electronics' operations in Russia and the CIS region, recently attended a major corporate event in Russia and promoted its B2B offerings: including heating, ventilation and air conditioning (HVAC) systems, digital signage and outdoor screens.

Samsung told The Korea Economic Daily it has yet to decide whether or not to resume business in Russia.

However, its marketing activity in the country has surged 30% in the January-February period compared with the year before, according to TelecomDaily. The Russian data provider said Samsung has launched commercials through the country’s largest telecom service provider MTS.

Samsung's Galaxy was the No. 1 smartphone brand in Russia between 2011 and 2019, according to Online Market Intelligence. However, since the outbreak of the Russia-Ukraine war, Chinese and Turkey rivals have taken its place.

Samsung established a home appliance manufacturing plant in Kaluga, near Moscow, in 2008, producing TVs, refrigerators and washing machines. In March 2022, it suspended its operations, citing supply chain disruptions.

Meanwhile, Hyundai Motor has yet to officially return to Russia after its exit in 2023.

In late 2023, the South Korean carmaker sold its St. Petersburg plant for only 10,000 rubles ($111.2) to Art-Finance LLC, a subsidiary of Russian auto dealer Avilo. The sale agreement includes an option for Hyundai to repurchase the assets at the sale price within two years.

In 2021, Kia Corp. and its sibling Hyundai ranked as the top two best-selling foreign car brands in Russia, with sales of 205,801 and 171,811 units, respectively.

South Korean companies are striving to tap into Russia’s substantial purchasing power. With a population of 140 million and per capita gross domestic product (GDP) of $14,400, the country rivals India not only in scale but also in consumer spending potential.

Write to Ui-Myung Park at uimyung@hankyung.com
 


Yeonhee Kim edited this article.