Major partners of LG Electronics are joining the company’s expansion into India to support its new manufacturing plant. The establishment of a “comprehensive appliance cluster” in the region is expected to enhance production efficiency and reduce logistics costs.
According to the Andhra Pradesh State Ministry of Industry and Commerce on the 21st, four partner companies will set up new production bases near LG Electronics’ appliance factory in Sri City. These suppliers will manufacture core components supporting LG’s production processes locally, maximizing supply chain efficiency and strengthening production flexibility.
The expansion will also include four key suppliers: Ecoria Kuroda Electric India (EKI), a joint venture between South Korean plastic injection molding specialist Ecoria (ECOREA) and Japan’s Kuroda Electric; Haengsung, a producer of printed circuit boards (PCBs) and wire harnesses; Kyungsung Precision, specializing in precision molds for home appliances; and Taesung Electronics, a manufacturer of metal press components for air conditioners and refrigerators.
Specific details such as investment size, groundbreaking timelines, and operational schedules for the partners’ new plants have not been disclosed. They are expected to be established sequentially in line with LG’s Sri City factory construction and operation plans.
LG Electronics aims to transform Sri City into a complete home appliance ecosystem—from core components to finished products—by collaborating with its partners. Proximity-based production is anticipated to improve efficiency and optimize logistics operations. This strategy will allow LG to respond swiftly to local market demands while diversifying its global supply chain.
The Sri City plant will be LG’s third production base in India, following existing facilities in Noida and Pune. Since entering the Indian market in 1997, LG has built a localized business structure, including sales subsidiaries and auxiliary R&D operations alongside manufacturing sites.
LG is investing approximately 50 billion rupees to build the Sri City factory on a 300-acre site, with construction set to begin next month. The plant is expected to create 1,495 direct jobs along with numerous indirect employment opportunities. It will produce eight LG products, including refrigerators, air conditioners, washing machines, TVs, heat exchangers, compressors, and other components.
To incentivize LG Electronics’ expansion, the Andhra Pradesh state government has extended the special incentive package previously applied to the company’s Noida and Pune plants to the new Sri City facility. The inclusion of the four partner factories was a key factor in securing this favorable package. The incentives include a 100% capital investment subsidy for 20 years, a 50% power subsidy and electricity tax exemption, full reimbursement of water usage fees, a refund of state construction-related taxes, up to 6,000 rupees per worker per month for technical training (for five years), and waivers on various permit fees and registration taxes.
