LG Electronics' robotics business is taking shape towards the creation of an LG robot empire. LG Electronics started to make a foray into the smart factory market in China by appointing the chief financial officer (CFO) of LG Electronics China as an inside director of industrial robot company Robostar.
According to the Financial Supervisory Service (FSS) on July 17, LG Electronics acquired a 30% stake in Robostar and acquired the management rights at Robostar’s general shareholders' meeting. "We secured the management rights by acquiring a 20% stake by taking part in a capital increase with consideration for third party allocation and adding a 10% stake, part of the management’s stake," an LG Electronics official said. “By the end of next year, we will acquire an additional 3.4% from the management.”
Experts say that LG's decision is aimed at China's smart factory market. China accounts for about 18% of the global smart factory market. The global smart factory market is forecast to grow from US$ 120.9 billion in 2016 to about US$ 205.4 billion in 2022, according to market research firm Markit and Markits.
Robostar, which mainly manufactures manufacturing robots used in production processes for displays, semiconductors, and automobiles, has expanded its business in China by establishing a subsidiary in Shanghai in 2003 among others. "The acquisition of this management right will respond to local demand for manufacturing robots," a robot industry official said. "Robostar can be used to invest in facilities of LG companies in China such as LG Electronics and LG Display."
It is also forecast that LG will accelerate its entry into the home and commercial robot market. The sale of LG Robot brand 'CLOi' is expected to start after the IFA 2018 in Germany in September. LG has been pursuing collaboration between Park Il-pyung, chief technology officer (CTO) and president of LG Electronics and Ryu Hye-jeong, a senior executive director of the smart solution business at H&A Business Division at LG Electronics. CTO Park has been in charge of the technological part while Ryu has developed business models.
In the case of CLOi Hom-Bot for home use, the robot can control various home appliances at home and express its feelings by moving its body. CLOi Hom-Bot is able to provide customized services by identifying the face of each family member. The LG Guide Robot and LG Cleaning Robot demonstrated at Incheon International Airport are expected to be introduced to various public institutions, offices, and convention centers among others.