By >Akihabara News Team
LG announces intention to enter water treatment business
LG Electronics reportedly said that it would start a water treatment business and actively consider investing more than $400 million to generate $7billion in sales from the new business by 2020.
LG, the world’s No.2 TV maker and No.3 handset maker, is expanding into new areas such as solar energy, healthcare and water processing operations, as profits from its main businesses come under pressure from rising competition and delays in new product launches.
“The water treatment business has strong growth potential as it is growing 15 percent annually on average… We will consider M&As and other forms of alliances actively to rapidly grow the business,” LG said in a statement.
Much of the investment will go toward acquiring the right technology and building up research and development in this field.
“Water affects every aspect of our lives, yet almost one billion people around the world don`t have clean drinking water and more than 2.5 billion still lack the most basic sanitation,” said Young-ha Lee, President and CEO of the LG Electronics Home Appliance Company. “LG hopes to be able to make a small but significant contribution to alleviating this global problem with its commitment to finding solutions through innovation and technology.”
LG will concentrate its R&D on developing an advanced membrane filtration system, its core technology and key component of water treatment solutions. LG will also expand its internal capabilities with the additional hiring of membrane filtration experts and process engineers. The company will also be pursuing various types of partnerships, mergers and acquisitions as part of its strategy to expand quickly.
LG will begin with industrial water treatment and expand its coverage into sewage and drinking water treatment. The company eventually plans to enter the business of water treatment engineering and procurement as well as operation and maintenance across the municipal sector.
“The global water crisis isn’t going to go away by itself – governments, citizens and corporations will all have to work closely together,” said Mr. Lee. “The water business has been growing by an annual rate of 15 percent so there’s an incentive for companies to invest in finding solutions, but beyond the business, I think this is one problem where LG’s experience and commitment to finding sustainable solutions will be a huge advantage.”