While LG SA has felt the pinch of the global economic slowdown, its investment rate has not been affected, and the company plans to open a manufacturing plant in the country next year.
Newly-appointed MD Peet van Rooyen notes the company's philosophy for dealing with global economic woes has been to keep investing. Van Rooyen is the first non-Korean country head to be appointed by LG, anywhere in the world.
“For us, it's about making the right investment. The philosophy here is that during tough times one should keep spending. For next year, we will focus on three growth areas - mobile communications, LCD markets and commercial air-conditioning.”
The company is a relative newcomer to the South African mobile device market and has a lower customer base locally than any of its international operations. Van Rooyen says the company will focus on convergence as a means of boosting its local market share.
“We want to provide the latest in communication technology. We've been conducting consumer insights and we've uncovered consumer needs that were not revealed to us before. Mature mobile devices are our growth engine in this country and we will be looking at mobile convergence - mainly laptop and phone convergence - as part of our business development strategy.”
Protective measures
The company is feeling the effect of changing global spending patterns. Van Rooyen states there is a withdrawal of foreign direct investment, and high interest and exchange rates have had a greatly negative on the prices of imports - which the company is reliant on.
One solution available to the company is increasing its investment in local operations and development. Van Rooyen announced the company will initiate this with the opening a manufacturing plant in the country early next year - a move which forms part of the company's strategy to cater specifically to local consumer needs.
Van Rooyen also stated the decrease in consumer spending patterns in SA has not only been caused by the current economic crisis, but via the tightening of credit regulations through the National Credit Act.
LG's customer base has decreased slightly as retail chains have been affected by such policies.
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