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LG to operate domestic AC production facility by year-end
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I
n its 35th year of operations in Indonesia, South Korean electronics company PT LG Electronics Indonesia (LG) has announced its readiness to operate an air conditioner (AC) factory in the country to answer to both domestic and export demands.
As an expansion of its AC production facilities in the country, the new factory will be located in Cibitung, Bekasi, West Java. Occupying an area of 32,000 square meters, it will serve as a production center for residential and commercial building AC needs.
With a total initial investment of Rp 374 billion (US$22 million), the factory is slated to be fully operational by the end of this year, with an initial production capacity of around 1.8 million AC units in its first year. In its plan, LG will increase production capacity two-fold in the following years.
"We are proud to announce this as our real support for the Indonesian people," said Ha Sang-chul, president of LG Electronics Indonesia. "This is a strategic investment that confirms the company's evolutionary steps in creating jobs while becoming a leader in the domestic manufacturing process."
Regarding its plan to produce AC units domestically, LG stated that it will apply the same stringent Korean quality standards that apply to all of its global production facilities. This will be done by implementing strict quality control at every stage of production to ensure maximum performance, energy efficiency and reliable durability.
According to Ha Sang-chul, efforts to ensure that the quality of LG AC units produced domestically will be equal to the quality of LG AC at the global level are inseparable from the high reputation of LG AC for innovation and consumer trust across the globe, including among Indonesian consumers.
To that end, LG AC products, especially for the household category, have received numerous awards, including the Top Brand Award 2024-2025, Brand Choice Award 2024-2025, Wow Brand Award 2025 and Super Brand Award 2025. In addition, the LG Inverter AC with a capacity of 0.5 PK has received test result certification from the University of Indonesia as an air conditioning product that has a daily electricity bill of only Rp 1,500.
Support for Indonesian economic development
Mike Kim, product director of LG Electronics Indonesia, said that the new AC production facility was not only focused on efforts to meet market demand, but was also a form of the company’s real support for domestic economic development.
"[LG aims for] more than job creation, but also economic growth that prioritizes the creation of a sustainable environment," he said.
In terms of economic growth, Mike explained that the factory is a form of supply chain localization and will support the achievement of the local content requirement (TKDN) targeting up to more than 40 percent in accordance with government policy.
Meanwhile, attention to creating a sustainable environment is shown through the use of environmentally friendly R32 refrigerant and the production of ACs in accordance with the minimum energy performance standards (SKEM) of up to five stars. This is in line with government policy for the harmonization of the ASEAN SKEM.
Additionally, the AC factory will further complement LG's business structure in Indonesia. At the end of this year, LG will have three groups of production facilities, including TV as well as household electronic devices such as refrigerators and washing machines. In addition, the company’s business structure in Indonesia also includes research and development centers, marketing centers, user services and product distribution chains spread across the archipelago.
"With the completeness of the business structure that will later be strengthened by the existence of this new AC factory, it will not only increase our speed in meeting high domestic market demand, but in the future this new AC factory will also have a target to meet the needs of the international market [through exports]," said Mike.
"The synergy of this structure in the great spirit of providing better services for the Indonesian people can become an embryo for the growth of various innovations that will strengthen the company's evolutionary steps into a smart life solution company in the world and also in Indonesia," said Ha Sang-chul.
