LG Electronics breaks ground on $600 mn home appliance plant in India

South Korea’s LG Electronics Inc. has broken ground on its third home appliance manufacturing plant in India with a $600 million investment to expand its production footprint in one of the world’s fastest-growing consumer markets.

The new plant, to be located in Sri City, an industrial hub in the eastern state of Andhra Pradesh, follows the company’s existing facilities in Noida and Pune, and underscores LG’s ambition to solidify its standing as the leading appliance brand in India.

The move is also in line with the company’s broader strategy to strengthen its presence across the so-called "Global South" – emerging markets in Asia, Latin America and Africa.

LG said on Thursday that the groundbreaking ceremony was attended by senior Indian state officials and executives from LG, including Nara Lokesh, minister for human resources development of Andhra Pradesh; Industries Minister Tumbalam Gooty Bharath; and Lyu Jae-cheol, president and head of LG’s home appliance division.

The Sri City factory, sprawling over one million square meters with a total floor space of 220,000 square meters, will initially focus on air conditioner production starting late 2026.

By 2029, it will ramp up production to include washing machines, refrigerators and air conditioner compressors, with an annual capacity of 800,000 refrigerators, 850,000 washing machines, 1.5 million air conditioners and 2 million compressors, according to LG.

INDIA: WORLD’S MOST POPULOUS, FIFTH-LARGEST ECONOMY

The investment comes as LG seeks to strengthen its foothold in India, which recently overtook China as the world’s most populous nation and surpassed the UK to become the fifth-largest economy in 2022. Its economy grew 8.2% in 2024.

Despite its scale, India’s household appliance penetration remains relatively low, with washing machines in just 30% of homes and air conditioners in 10%, indicating considerable room for growth.

“India is not just our largest overseas market but also a strategic hub for growth in the Global South,” said Lyu. “The Sri City plant marks a milestone in our journey to become India’s true national brand in consumer electronics.”

With its coastal location near Chennai, the Sri City plant is well-positioned to serve not only southern India – currently underserved by LG’s northern and western plants – but also nearby export markets across South Asia and the Middle East.

The company has signaled that it will focus on high-value, premium appliances at the new plant, such as French-door refrigerators and front-loading washing machines, catering to a rising middle class and shifting consumer preferences in the region.

CATERING TO LOCAL TASTE

LG has operated in India since 1997, building an integrated local business spanning manufacturing, sales and R&D.

In 2024, its Indian operations, LG Electronics India Pvt., posted 331.8 billion won ($237 million) in net profit on record sales of 3.79 trillion won, up 43.4% and 14.8%, respectively, from the previous year.

Localization has been key to LG’s success. In addition to product competitiveness, LG has introduced products optimized for the local lifestyle.

The Korean company recently introduced a series of convertible refrigerators that can be converted from freezers to fridges to meet local demand for large refrigerated space due to the vegetarian-oriented food culture, and washing machines with settings for delicate traditional garments like sarees.

Alongside manufacturing, LG has invested heavily in service infrastructure, with over 700 branded retail outlets and 900 service centers nationwide.

Its customer call service supports 12 Indian languages, a rarity even among local competitors.

“The Sri City facility is not just an investment in bricks and mortar,” said Lyu. “It’s a commitment to delivering innovation from within India, for India and beyond.”

IPO ON INDIAN BOURSE

LG is expanding its facilities in India as an alternative to China amid escalating trade rows between the world’s two largest economies – the US and China.

The Korean company is also seeking an initial public offering (IPO) of its wholly owned Indian affiliate on the Indian stock market to raise as much as 2 trillion won in funds for business expansion.

LG initially planned to list its Indian subsidiary on the local stock market in early May after getting the nod for its preliminary IPO plan from the Securities and Exchange Board of India in mid-March.

However, sources said LG will likely put off the IPO amid growing volatility in the global financial market due to concerns of a US tariff-triggered economic downturn.

Write to In-Soo Nam at Isnam@hankyung.com

Jennifer Nicholson-Breen edited this article.