LG Electronics Inc. has officially broken ground on a new home appliance factory in Sri City, Andhra Pradesh, reinforcing its commitment to one of the world's fastest-growing consumer markets. The groundbreaking ceremony held on May 8, 2025, was attended by notable figures including Nara Lokesh, the state's Minister for Human Resources Development, and LG Electronics executives, such as President Lyu Jae-cheol.
The new facility, which represents an investment of $600 million, is expected to begin production by the end of 2026. This plant will be LG's third production base in India, following existing factories in Greater Noida, Uttar Pradesh, and Pune, Maharashtra. The Sri City plant aims to bolster LG’s manufacturing capacity and serve as a regional hub for India and neighboring markets, including the Middle East and Bangladesh.
According to LG, the Sri City plant will have an impressive annual production capacity of 800,000 refrigerators, 850,000 washing machines, 1.5 million air conditioners, and 2 million air conditioner compressors. "The construction of the Sri City plant is a milestone that signifies LG Electronics' commitment to becoming a true national brand in India," Lyu stated during the ceremony.
With the new facility, LG Electronics aims not only to meet the rising demand for high-end home appliances but also to strengthen its local supply chain. The factory is expected to create direct employment opportunities for approximately 1,495 individuals and indirectly employ 10,000 people, contributing significantly to the local economy.
The plant's strategic location in Sri City, a special economic zone, is expected to enhance LG's production capabilities and localize its supply chain further. This move aligns with LG's broader strategy of expanding its footprint in the Global South, which includes Latin America, the Middle East, Africa, and Asia.
LG Electronics has been actively pursuing growth in India, a market where the current household penetration rate for washing machines stands at just 30% and for air conditioners at only 10%. This indicates substantial growth potential for LG's products, particularly as the company plans to introduce India-specific models tailored to local preferences.
As part of its expansion strategy, LG has plans to introduce innovative products, including convertible refrigerators designed for vegetarian diets and washing machines with dedicated cycles for traditional clothing like sarees. The new facility will mainly focus on producing high-end lines, such as French door refrigerators and front-loading washing machines.
The company has been in India since 1997, when it opened its first plant in Noida, followed by a second facility in Pune. LG Group Chairman Koo Kwang-mo visited India in February 2025 to inspect the manufacturing facilities and research and development center, emphasizing the importance of the Indian market in LG's global strategy. "The next few years are critical in determining how we can differentiate ourselves and stay ahead of competitors in the Indian market. Now is the golden time to secure sustainable leadership," Koo remarked.
In addition to its manufacturing plans, LG Electronics is also preparing for an initial public offering (IPO) of its Indian unit, valued at approximately $1.5 billion. Initially expected to launch in May 2025, the IPO has been delayed due to market volatility influenced by uncertainties surrounding U.S. tariffs. The new timeline now targets the second or third quarter of fiscal year 2026.
Despite the delay in the IPO, LG's focus on expanding its manufacturing capabilities in India underscores the company’s long-term commitment to the region. The Sri City plant is expected to play a crucial role in enhancing LG's local supply chain and meeting the growing demand for its products across India and beyond.
As LG Electronics moves forward with its ambitious plans, the company is poised to solidify its position as a leader in the Indian consumer durables market. With its new manufacturing facility, LG not only aims to boost production but also to create a robust ecosystem for white goods manufacturing in Andhra Pradesh, contributing to the state's economic development.
The groundbreaking of the new plant marks a significant step for LG Electronics as it continues to invest heavily in the Indian market. The company’s efforts to localize production and create employment opportunities reflect a strategic approach to tapping into India's burgeoning consumer base.
As the facility begins operations and ramps up production, LG Electronics will be well-positioned to cater to the increasing demand for high-quality home appliances, thereby enhancing its competitive edge in the region. The commitment to innovation and local production is expected to resonate well with Indian consumers, further establishing LG as a household name in the country.
In conclusion, LG Electronics' new plant in Sri City is not just an investment in infrastructure but a pledge to enhance its presence in the Indian market. With the potential to significantly increase production capacity and create jobs, LG is laying the groundwork for a prosperous future in one of the world's most dynamic economies.
