LG Electronics seeks brand leadership in Africa - despite recession

This week at the Saxon Hotel in Sandhurst, Johannesburg, CEO and Vice-Chairman of LG Electronics, Yong Nam, outlined the company's commitment to increase its investments and open new ventures in sub-Saharan Africa.

“I want to assure you that we would not reduce - but increase - our investments in research and development (R&D), marketing, branding and design in Africa and South Africa in particular, which we see an important hub for our expansion into sub-Saharan Africa,” Nam, who is visiting SA for the first time, told the media.

“South Africa was one of the earliest and remains the fastest growing market for mobile phones and technology,” he said.

“This was largely because mobile phones were portable and assisted in overcoming mobility infrastructure limitations in South Africa. But now South Africa's infrastructure is catching up and more people are demanding our other consumer electronic products. This makes South Africa and Africa one the most important territories for our company in 2009.”

Nam was accompanied by the company's SA MD Peet van Rooyen, the company's chief marketing officer Dermot Boden, chief technology officer Woo-Hyun Paik and LG CEO for Middle and Africa Ki Wan Kim.

Tightening CAPEX, but…

The Middle East and Africa region remains one of LG's top international markets, and sales in this region touched US$3.9 billion (R39 billion) in 2008 - 22% more than in 2007.

As the global economic Armageddon continues to unleash its fury, many companies have started tightening their capital expenditure, and LG is planning to do the same.

However, Nam said categorically: “We plan to tighten CAPEX but we will maintain our investments in branding, marketing and R&D, because those are our lifeblood.”

The International Labour Organisation estimates that at least 51 million people will lose their jobs by the end of 2009. The two top economic superpowers, the US and Japan, and their ally, the European Union, are already swimming into a sea of recession and South Africa is set to join them slowly but surely.

“We live in tough and painful times, but we will survive the challenges the world and our industry face. The global recession will not last forever,” Nam said.

“But we believe that if we can invest more while our competitors do nothing and retreat, we will remain a premium brand through product leadership and bring many innovations to the market.”

“Africa is a vital market for LG, we are accelerating our penetration into the Middle East and Africa. Our visit is to show our commitment to this region and assure you that we will do whatever it takes to be winners in this part of the world which is full of potential.”