LG Mid East & Africa notches up 22 percent half year growth

Global digital leader LG Electronics has reported a 22 percent rise in its Middle East and African sales in the first half of this year compared to the first six months of 2002 - producing a regional sales turnover for the period of USD 709 million.

Ten out of the LG region's 12 area bases recorded positive growth with only Jordan and Tunisia falling into negative territory.

Top performing countries were Iran, which produced a sales turnover of US $162 million - up 36.10% on the first six months of 2002 - and the United Arab Emirates, which returned turnover of US $119 million - a rise of 48.30% over the same period.

"Despite the year's earlier regional uncertainties culminating in hostilities in Iraq which negatively impacted results from Jordan, and lost business in Tunisia where tight government monetary restrictions reduced local business credit limits, the region has continued to perform significantly well," said Mr M. B. Shin, President, LG Electronics Middle East & Africa.

"Continued sales growth and performance have been achieved through the aggressive pace of bringing new products to market and intensive region wide marketing initiatives.

"This stellar performance underlines the importance of the region and justifies our recent substantial investment in the regional digital centre and the Middle East's first air conditioning academy, both of which are in Dubai. These two state-of-the-art facilities will also help us reach increased targets, which include achieving a sales turnover in the Middle East and Africa of US $2.3 billion by 2005."

Higher UAE sales have been accredited to boosting the available GSM and award-winning monitor range, the increase in central air-conditioning sales, including some high-profile project account wins and increased awareness of the brand's PDP range.

"At the same time, the UAE was once again the heart of many of our marketing efforts and has recently hosted our ground-breaking home networking product launch as well as our schedule of digital music festivals," said Shin.

Shin believes the company can revitalise its performance in Jordan, which is now responsible for sales in Iraq, with the ending of hostilities and a stepping up of marketing in the country.

"It has to be remembered that of all electronics producers, LG has the highest unaided brand awareness in Jordan - some 85% according to independent research - and this is a solid base on which to go forward."

LG has recently appointed its first public relations agency for the Jordanian market.

"This is the start of a major marketing push into that area," said Shin.

Over the past six months, countries producing the biggest percentage sales increases were Egypt, Pakistan and Morocco.

Egypt recorded a 76.3% rise in first half sales, with a turnover of US $72.5 million. Pakistan's half-year sales were up 76.1% to US $37 million and Morocco's rose 71.9% to US $24.87 million.

"In each of these countries we are now enjoying the fruits of several years of building a solid base and brand and focussing intensive marketing efforts on the local markets," said Shin.

"In Egypt we are now being positively impacted by the setting up, two years ago, of a subsidiary in that country. We now anticipate great things from this vast market, particularly from the GSM mobile phone segment," said Shin.

In Pakistan, LG strengthened its hold on the TV, monitor and residential air conditioning segments.

"LG is now a market leader in Pakistan as well as the country's leading supplier of imported washing machines. In addition, late last year we introduced our GSM mobiles to the country and these were aggressively marketed in association with World Cup Cricket. We are now well on our way to being the leading GSM company in the market," said Shin.

In Morocco, LG attributes increased sales performance to innovative channel and marketing strategies.

"LG, which opened a sales subsidiary in Morocco four years ago, is now actively involved in local community projects and has been established as a 'national brand," said Shin.

Regionally, top performing product sectors for the first six months were: air conditioners, which earned US $168 million, an increase of 19.36%; TVs, which brought in US $149 million, a rise of 4.10%, and I.T. monitors, which accounted for US $84 million - a growth of 27.20%.

Products which gained most ground in terms of percentage sales growth were GSM mobiles - sales more than tripled to US $27 million - vacuum cleaners, which rose 45.40% to US $8 million, refrigerators, which increased 36.50% to US $56 million and CD-Roms, which increased 36.30% to US $30 million.

"Digital appliances, which covers vacuum cleaners and refrigerators, is amongst the biggest investors in research and development in the LG infrastructure and has already claimed global leadership in the supply of a/cs and micro-wave ovens," explained Shin.

"This division's progress in the region is a reflection of its worldwide growth but also due to the introduction of highly differentiated models, such as the bag less vacuum cleaner and the flagship Cyking, a very popular model in this region, which boasts the Sani-Punch feature capable of superior dust suction and alleviating allergies and asthma."

Shin believes the half-yearly results have set LG Electronics Middle East & Africa well on course to beat its projected 2003 sales target of US $1.387 billion.

"Since the start of this year new product lines have been introduced into this region - most notably LG's entry into the PC and notebook segments," said Shin. "This will most definitely impact the yearly results and improve performance.

"Alongside this, new GSM mobiles models and new monitors have been introduced on a regular basis and this level of activity will be maintained.

"On the marketing front, we continue our commitment both to sports, cyber and community marketing as exemplified by last week's staging of the LG Middle East and Africa Peace Cup soccer tournament in which Iraq met Iran for the first time since this year's earlier hostilities and the forthcoming Cyber Champions Cup in the UAE.

"Our marketing will also move to take in more social issues in the future as we strive to become close to our customers and take on the mantle of the region's leading national brand."