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LG Electronics to close PDP plant in bid to reduce costs

South Korea's LG Electronics Inc said yesterday it is closing a plant that makes plasma display panels to cut costs and rejuvenate its business.

The company will stop producing flat panels at one of its four PDP plants in Gumi, 260km southeast of Seoul, said LG spokeswoman Judy Pae.

Pae said the shutdown is scheduled for the first half of this year.

"This move is to increase operational efficiency and to reduce costs" totaling US$22 million to US$32 million annually, LG Electronics said in a statement issued later.

"This is a part of LG's ongoing efforts to improve the performance of its plasma display panel business as a whole," the statement said.

LG Electronics is South Korea's largest consumer appliance manufacturer. Besides plasma displays, the company is also a major global producer of cell phone handsets.

The plant to be shut, named A1, is the oldest of the company's four and has an annual capacity of 840,000 42-inch plasma panels used in flat screen televisions, or 70,000 a month.

LG's total 42-inch plasma display module production capacity will decline to 360,000 units per month, or 4.32 million a year, with the loss of the A1 plant, the statement said.

LG Electronics lost 123 billion won (US$132.1 million) in the three months ended March 31. It recorded net profit of 150.8 billion won a year earlier.

The market for flat panels, including plasma and liquid crystal displays, has suffered amid oversupply and falling prices for the components.

LG competes with other plasma makers including South Korea's Samsung SDI Co and Japan's Matsushita Electric Industrial Co.

Samsung Electronics Co and South Korea's LG.Philips LCD Co are the world's two top manufacturers of liquid crystal displays.
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