The South Korean manufacturer of home appliances LG will close its plant in the Moscow region and transfer production from Russia to Uzbekistan or Kazakhstan. According to the source, part of the top management has already been moved to Tashkent.
In Uzbekistan, negotiations are underway with the local company Artel, which also produces Samsung equipment. LG has had a factory in Kazakhstan since 1998, but it closed a few years ago. The transfer of production to Uzbekistan is more profitable due to cheap labor, but there are more solvent consumers in Kazakhstan.
Artel Electronics said that there is no partnership with LG yet.
A source in Kazakhstan said that LG is negotiating with the authorities of this country. The Ministry of Digital Development, Innovation and Aerospace Industry of the country is discussing with the company the opening of a new enterprise.
LG Electronics Rus LLC owns land in the village of Dorohovo in the Moscow Region with an area of 102,256 sq. m and cost about 46 million rubles. There is a plant with an area of 22 thousand square meters on the site. m. In 2021, its revenue amounted to 119 billion rubles, and net profit - 7 billion rubles.
According to Holodilnik.ru, in January-August, the share of LG in the Russian Federation in the segment of washing machines was 17% against 22% in the same period of 2021, refrigerators - 10% (was 12%), TVs - 7.8% (was 15 .2%).
Finam analyst Leonid Delitsyn notes that 80 joint ventures with Korean companies operate in Uzbekistan, and the transfer of production to this country will be more profitable than to Kazakhstan. However, the Kazakh market is more attractive due to significantly higher per capita incomes.
Alexey Pogudalov, commercial director of Holodilnik.ru, is not sure about LG's move to Uzbekistan, since Artel has no free capacity and there are difficulties with the sale of products. The plant in the Moscow region was set up to sell products in the Russian Federation and neighboring countries, but the vast majority was produced specifically for Russia.
A source in the Kazakh market believes that it is unprofitable for Artel to cooperate with LG, as the brand will compete with it.
In March, LG announced the suspension of the supply of home appliances and electronics to Russia.
Meanwhile, Samsung, which has also suspended deliveries to the Russian Federation, may repurpose its plant in the Kaluga region for parallel imports. One of the options is to export products to the EAEU, in order to then return them to the Russian Federation.
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