LG converts phone production lines to make home appliancesLG Electronics is fast converting its overseas smartphone manufacturing lines into facilities that produce home appliances, industry insiders said Tuesday, following its decision to withdraw from the mobile business.
LG said the Brazilian government last month approved its plan to expand its Manaus plant in Amazonas, northwestern Brazil, in a move to shift its production lines from the Taubate site on the east coast.
When the $62 million project is completed, LG Electronics will have new production lines for laptops and monitors at the Manaus plant.
The Korean tech giant said all of its Brazilian manufacturing will be consolidated in Manaus down the road.
Started in 1995, the Manaus plant was originally established to manufacture TVs, microwave ovens and DVD players, with air conditioners added in 2001. The Taubate plant has been in operation since 2005, producing mobile phones, monitors and laptops.
The latest relocation follows LG’s move in April to convert its smartphone line at the Haiphong plant to make home appliances in northern Vietnam.
LG earlier announced it will exit from the mobile business by July 31 after years of money-losing performances. Since then, it has been working to relocate its mobile workforce and resources to its core home appliance business.
Demand for LG’s premium appliances has been soaring on the back of the pandemic-induced stay-at-home trend.
LG’s home appliance and air solution unit in the first quarter posted 6.7 trillion won ($6 billion) in revenue and 919.9 billion won in operating profit, both the largest for its quarterly performance.
The utilization rate of its home appliance production lines reached a five-year high in the first quarter of the year, according to LG.
The rate for the refrigerator manufacturing lines stood at 153.2 percent, while that of air conditioner and washer production facilities came to 142.8 percent and 114.4 percent, respectively.
A rate over 100 percent means that the company is fully running its productions lines and additionally operating facilities with extra work.
The utilization rate of LG’s washer and refrigerator lines were in the 80 percent range in the second quarter of last year. However, it recovered to 100 percent in the fourth quarter of 2020.