Factory in Paraná starts operating in 2026 making refrigerators; there are also plans for washing machines and dryers

04/26/2024

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Daniel Song — Foto: Gabriel Reis/Valor

LG Electronics is expanding white goods production in Brazil and launching a relationship program to better understand Brazilian consumers. In the first quarter of 2026, the Korean electronics and household appliances giant begins production of refrigerators in Fazenda Rio Grande, in the metropolitan region of Curitiba, in the Paraná state.

The investment in the operation will be $250 million and could reach $300 million, Daniel Song, LG’s chief executive for Latin America, told Valor.

“We have a plan to strongly expand our white goods operation [in Brazil]. And we will start with refrigerators,” said the executive, who took over Latin American operations in January this year. Mr. Song is also LG’s CEO for Brazil since last year.

In addition to refrigerators, the new factory will produce washing and drying machines. Currently, refrigerators are imported from Indonesia, China, South Korea, and Mexico. On the other hand, 90% of washing machines are imported from China.

Initially, production will meet local demand, but LG mulls exporting part of the production to Argentina, the executive said. “The new president of Argentina [Javier Milei] is adopting a policy to have more freedom and import products.”

The location of the new factory, in Curitiba, facilitates export logistics to Argentina. The company has a factory in Manaus, Amazonas, that manufactures TV sets, computers, microwave ovens, and air conditioning units, and maintains facilities in Taubaté, São Paulo. The old factory in the São Paulo state has housed customer service and maintenance services since 2021, when LG stopped producing cell phones globally and transferred the production of notebooks and computer monitors to Manaus.

With 30 years at LG, and 17 working in Latin American countries, the Korean executive states, “Brazil has high growth potential.” In addition to expanding local production, the company debuted its relationship program, LG Family Club, in Brazil, earlier this month.

“We thought of a method to establish closer contact with consumers because they usually purchase the product in-store, and afterward, we lose touch with them,” said Mr. Song, who initiated the program in Peru in 2016 before introducing the concept to Mexico in 2021.

The company plans to provide additional information about its products based on customer demand, such as video tutorials, and facilitate quick communication through the website and a WhatsApp channel dedicated to registered customers, he added.

“When we notice that several consumers are asking about the same function, we can create an online course for that topic or inform about a product update,” said Mr. Song. In addition to tutorials, the program offers raffles for experiences, such as tickets to live music shows. Since earlier this month, 5,900 consumers have connected to the program, said LG.

The United States, India, and South Korea account for most of the company’s revenues. Brazil, Germany, and Canada compete for the next positions.

LG Electronics ended the first quarter of fiscal 2024 with a global profit of 585.4 billion South Korean won ($426 million), up 24.2% year over year. Consolidated revenue in the three months ended in March was 21.09 trillion South Korean won ($15.4 billion), up 3.4% year over year. The white goods and air conditioners segment, which generates the largest share of LG’s revenue, earned 8.6 trillion South Korean won in the first quarter, up 7.2% year over year. The home entertainment division, which houses TV production, reported revenue of 3.5 trillion South Korean won, up 4% year over year.

The scenario LG reports for the global market as a whole (not necessarily for its sales) indicates a falling demand for home appliances in the first half and growth in the second half of the year.

*Por Daniela Braun — São Paulo

Source: Valor International

https://valorinternational.globo.com/