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LG Electronics sets sights on green building market in Europe Korean tech giant establishes HVAC subsidiary in Hungary for B2B expansion

Translated by Ryu Ho-joung 공개 2022-05-25 08:11:23

이 기사는 2022년 05월 25일 08:11 더벨 유료페이지에 표출된 기사입니다.

South Korea’s LG Electronics has formed a heating, ventilation and air conditioning (HVAC) subsidiary in Budapest, Hungary, according to industry sources, a move to increase its share in the burgeoning commercial HVAC market in Europe where the low-carbon transition drives growth in green buildings.

ACE R&A Hungary Limited Liability Company, which was established earlier this year, produces and sells commercial HVAC equipment. It is the electronics giant’s first such facility abroad.

“We established a new base of operations in Hungary to respond to growing demand for HVAC equipment in Europe,” an official at LG Electronics said. “We will expand the business with a focus on business-to-business (B2B) services.”

The commercial HVAC market has been in the spotlight in recent years as demand for efficient energy management rises. Commercial HVAC systems, which are installed in large buildings, control indoor temperature and humidity simultaneously.

In Europe, demand for green buildings is growing rapidly as the shift to a low-carbon economy accelerates. A green building is a building that is designed and constructed in an environmentally sound way by using technologies that increase energy efficiency and reduce environmental pollution.

The HVAC market has a high barrier to entry. With more than 50 years of history in the air solutions space, LG Electronics has vertically integrated operations, with its products ranging from small air conditioners to large chillers.

ACE R&A, a subsidiary of LG Electronics, focuses on the commercial HVAC market, while LG Electronics’ Air Solution division offers chillers and residential HVAC systems.

LG Electronics generated greater revenue from residential HVAC solutions than the B2B, commercial HVAC business until 2015. However, the trend has since been reversed as demand for air conditioners stalled and the commercial air conditioning market continued to grow.

In South Korea, the company provided HVAC systems for Starfield Hanam, Paradise City in Yeongjong Island and Korea Electric Power Corporation’s Naju branch. Its overseas projects include HVAC systems for French industrial group Bouygues’ headquarters, Saudi Arabia’s Qurayyah Power Plant and United Arab Emirates’ nuclear power plant.

“Building a long-term relationship with customers is especially important in B2B, HVAC projects,” said an industry insider. “LG Electronics is well positioned to benefit from the growth in the global commercial HVAC market.” (Reporting by Hyun-ji Sohn)
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