DURBAN - LG Electronics South Africa has opened a R21million factory and distribution centre in KwaZulu-Natal, providing a much-needed boost for the country’s declining manufacturing sector that has been pummelled by power outages.
Power utility’s Eskom blackouts are estimated to have cost the economy as much as R118billion last year.
KwaZulu-Natal Premier Sihle Zikalala said on Friday that the factory’s opening meant a lot for the economy of the province.
“Once you have a manufacturing industry, it also spins off to other sectors in the value chain. We thank LG Electronics as it will grow opportunities for jobs. This will also grow opportunities for those in the value chain,” said Zikalala.
He said that, KwaZulu-Natal, which is South Africa’s second largest manufacturing contributor, was facing a number of challenges that have forced manufacturing companies to shrink.
“As a result, the share of the manufacturing output as a proportion of gross domestic product (GDP) dropped from 21 to 18percent in 2010 and 16percent by the end of last year. Your contribution will effectively take us further and increase this GDP, especially in the manufacturing sector.”
Zikalala said that, in 2018, revenue in large screen panel television sets and other small appliances grew by 7percent in South Africa.
Despite difficult economic conditions, it was pleasing to note that the consumer electronics industry remained instrumental in supporting industrialisation, he said.
LG Brand marketing manager Steven Bosch said the launch was the start of a new era for the company as they started production of their products in Durban, which was strongly positioned to help them service the country better logistically.
He said the factory, in Conubia, north of Durban, was the only one LG ran in Southern Africa and was significant, as it would enable LG to use Africa as a centre-point for driving products to the rest of the region.
“We will also be able to position ourselves strongly for the export market looking towards SADC, as well as the West African region,” said Bosch.
LG Electronics SA said it would look into developing products that would assist people.
“For instance, in South Africa we are facing problems like water shortages as well as power shortages that cause appliances to break down,” said Bosch.
LG said it was installing inverter technology in washing and dish washing machines to use less water than conventional models.
LG Electronics employs about 500 people across its business subsections.