South Koreas LG Electronics Inc. is shedding another money-losing hardware business – solar panel production – against Chinese competition after it dumped mobile business of 26 years last year to focus on premium and future-growth business.
LG Electronics which ascended to worlds top rank in white goods last year in a disclosure Wednesday reported that the companys board on Tuesday decided to close the solar panel business by June 30.
Shares of LG Electronics were trading 2.06 percent higher at 124,000 won ($104) on Wednesday morning.
LG Electronics launched solar panel business in 2010 and engaged in operations focusing on high-efficient, premium modules such as n-type and two-sided panels. The company, however, lost competitiveness versus the flood of cheaper Chinese products.
Overall business environment also deteriorated on rising raw materials costs.
LG Electronics global share in solar panels stayed in 1 percent range, while sales and operating income have been on constant fall.
̹ Ȯ The businesss sales that stood at 1.1 trillion won in 2019 shriveled to 800 billion won in 2020.
Solar panel production will continue until the second quarter given future service support and to maintain adequate inventory. About 900 employees in energy business, including 600 in solar panel business in Korea will be relocated.
LG Electronics said that its business solutions company that operates solar panel business will reorganize its portfolio around the key pillars – information technology and information display.
The company will concentrate on growth sectors and plug into a new era of sustainability through rapidly evolving products and solutions including energy storage system, energy management solutions, and other yet-to-be-announced advancements, it said.
LG Electronics shuttered mobile phone business and shifted attention to automotive electronics by setting up e-powertrain joint venture with Magnam International Inc. last year.
By Lee Eun-joo
[ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]