LG Electronics Aims to Double Sales to Businesses to $10 Billion by 2014

LG Electronics Inc., the world’s second-largest maker of liquid-crystal-display televisions, aims to double sales of flat screens and other gear to businesses by 2014, as it seeks new sources of growth.

LG, also the world’s third-biggest phone maker, is looking to generate $5 billion in sales to enterprises including hotels and restaurants by the end of this year and achieve $10 billion within the next four years, said Soon Kwon, chief executive officer of LG’s Business Solutions Co. The division had sales of $4.6 billion in 2009, its first year, according to Seoul-based LG.

LG is seeking new revenue after reporting a record loss of 120 billion won ($101 million) at its handset business in the second quarter, while profit at the home-entertainment division, which makes TVs and DVD players, slid 90 percent to 28.1 billion won. The two units account for 75 percent of overall sales. LG had global revenue of 55.5 trillion won, excluding internal transactions, in 2009.

“Business solutions is a new area, and it’s a blank page at the moment, so whatever they do, they can be the first to do it,” said Kang Yoon Hum, an analyst at NH Investment & Securities. Mobile phones and TVs is “an area where they can’t do much better than now,” he said.

The division that sells screens, security equipment and other electronic devices to businesses is one of the “few growth engines for LG Electronics going forward,” said Robert H. Lee, vice president of strategy and business development.

LG Electronics fell 0.6 percent to close at 95,800 won on the Korea Exchange. The shares have dropped 21 percent this year, compared with a 4.9 percent gain on the benchmark KOSPI Index.

To contact the reporter on this story: Jun Yang in Seoul at jyang180@bloomberg.net

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