Tuesday, February 7, 2023
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LG may move production from Russia to Uzbekistan or Kazakhstan

How reports “Kommersant” citing its own source in the household appliances market, the leadership of the South Korean LG is discussing the possibility of closing a plant in Russia and transferring production to Uzbekistan at Artel facilities. This plant produces refrigerators, washing machines and televisions.
Part of the top management of Russian LG has already moved to Tashkent. TecomDaily CEO Denis Kuskov is also aware of the plans to move. Artel Electronics clarified that at the moment there is no partnership with LG, and information about the negotiations is not disclosed.
The interlocutor of the publication in Kazakhstan says that LG is negotiating with the authorities of this country. Since 1998, LG has already operated a plant in Almaty with the same assortment as the Russian plant. But a source close to the Kazakh government said the plant was closed a few years ago, and now the country’s Ministry of Digital Development, Innovation and Aerospace is in discussions with LG to open a new one. Kommersant sent a request to the ministry. Tatyana Shakhnes, director of LG for PR in Russia, did not respond to calls and messages from Kommersant. The company’s global office did not respond to a request either.
According to Holodilnik.ru, in January-August, the share of LG in the Russian Federation in the segment of washing machines was 17% (for the same period in 2021 – 22%), refrigerators – 10% (against 12%), TVs – 7.8% ( 15.2%. Shares continue to fall rapidly, according to the retailer. LG management must make some decision about the fate of production in Russia, Finam analyst Leonid Delitsyn believes.

 

There are 80 enterprises operating in Uzbekistan, jointly with Korean companies. According to the results of pre-revolutionary and Soviet history, 200 thousand Koreans live in the country, so the diverse business ties between the two countries should not be surprising.

 

Leonid Delitsyn

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In his opinion, the transfer of production to Uzbekistan will be more profitable than to Kazakhstan, due to cheaper labor.

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