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LG Electronics set to post $2.8b sales

DUBAI — LG Electronics said it was firmly on course to achieve its 2005 goal of $2.8 billion overall sales in the Middle East and Africa region thanks to "an exceptional surge" in notebook and mobile handset sales.

The Korean digital giant, which is targeting a 50 per cent growth globally to seize the No. 3 spot in handsets in two years, said a predicted 34 per cent regional growth in overall sales would position it to reinforce its leading profile in the mobile telecom sector.

C.H. Lee, who has been appointed as the Korean digital giants's new president of LG Electronics Gulf FZE, said he was confident of attaining the sales target as he finds the region with tremendous growth opportunity in all product segments, particularly in notebooks and handsets, where LG has been consolidating its position with new product introductions and fresh market forays.

"With the mobile phone subscribers in Middle East set to grow by over 34 per cent in 2005, the Middle East is one of the few regions in the world where the mobile telecommunications industry will continue to expand and experience strong growth. By December 2005, total subscribers in the Middle East, Gulf and North Africa will climb to 40.8 million, rising to 52.1 million by the end of 2006," Lee said.

As LG enters a new phase of development in this region, Lee finds the Middle East and Africa region that contributes significantly to LG's global results, increasingly strategic for its future growth.

Lee, a veteran in the Middle East having worked for LG in Egypt and Iran, believes that given the track record of LG's vibrant growth over the past few years, the sales target for the Middle East and Africa region, and in particular for the AGCC region, is not difficult to achieve.

He maintains that with the solid foundation set by the management team and employees, the new goal of taking the company to its next level of expansion could not be hard to achieve, "My main aim is to strengthen LG's position by rolling out technologically advanced products to cater to the demands of this market. We target a sales turnover of $100 million in notebook sales and $300 million in handset sales the Middle East and Africa region this year."

"Globally we expect to register a 50 per cent growth to seize the No. 3 spot in handsets in two years. Within five years, LG wants half of its sales to come from handsets, up from 28 per cent in 2004. We are investing $ 1.95 billion for R&D this year. LG will recruit more than 30 per cent of its researchers outside Korea and strengthen its mobile handset R&D division to include more than 5,000 researchers by 2006," said Lee.

He said LG's new joint venture agreement with Canadian telecom company Nortel Networks to provide cutting edge telecommunications equipment and networking solutions would better position it to gear up for the third-generation mobile phone market in the Gulf region. The new partnership will target domestic and foreign markets by combining Nortel's telecom equipment and LG's terminals.

Although the first Korean company to join the GSM Association, LG was a late entrant who began its GSM handset business only in 2000, Nevertheless, the GSM segment has been posting growth rate of 100 percent every year.

"Our telecommunication and handset business has boosted its sales of handsets from 6.9 million in 2000 to 44 million last year; LG is now the fifth largest mobile phone manufacturer in the world with seven percent global market share," said Lee.

Last year LG also sold three million 3G phones to Hutchison 3G, the global