LG prepares to develop its UK market

VRF air conditioning is at the heart of LG’s plans to treble its UK turnover by the end of 2007.In a UK market for VRF air-conditioning systems that is dominated by two major companies, Tony Gittings, general manager of LG’s air-conditioning division in the UK, believes the time is ripe for another player to come to prominence. LG is relatively new to the UK market, and is described by Tony Gittings as ‘not even being a force four years ago’. Sales have grown rapidly since, with the period January to September 2004 million being 40% up on 2003. He expects LG’s total air-conditioning sales in the UK for 2004 to reach £11 million. Experience Tony Gittings is a newcomer to LG’s UK operation, having joined just a few months ago from a major air-conditioning supplier, where he gained substantial experience of VRF systems. He also has experience in consultancy and contracting. In LG, he has joined a global company whose air-conditioning business alone in 2003 was $2.4 billion, having grown rapidly from $1.9 billion in 2002 and $1.5 billion in 2001. The company also has four air-conditioning research-and-developments, all equipped with towers for research into the development and performance of VRF systems in multi-storey buildings. The company also makes its own components such as heat exchangers, compressors and printed-circuit boards. At present, compressors for the Multi V heat-pump VRF range for commercial applications are supplied by Daikin, but LG will make its own next year. LG’s business in the uk so far has been mainly what Tony Gittings calls ‘rack-and-pack’ units. That is set to change, with a plan to develop the existing market in air conditioning, especially that for VRF, as LG works towards becoming a serious player in this sector. The target turnover for the end of 2007 is £30 million to £50 million, with, he says, at least 50% being due to VRF. These efforts will in no way be impeded by the product range available. As well as the Multi F (Flx)) range for light commercial applications, LG also offers Multi V heat-pump system for commercial applications and Ecovent heat-recovery ventilation systems. There are also controls ranging from wireless and wired remote through PC-based systems to an Internet-enabled system capable of controlling up to 4800 indoor units. All these air-conditioning products will be offered in the UK using R410A. 2-pipe VRF outdoor units have capacities from 13 to 100 kW, with a wide range of indoor units offering cooling capacities from 7 to 48 kW. An indoor unit special to LG is the ArtCool, which is becoming very popular for residential applications and for prestige commercial interiors. Track record In making a major impact on national markets, LG has an established track record. In Italy, the company claims to be number one in rack-and-pack — having overtaken other companies. In Greece, LG says it is one of the top three companies and has been a major force there or at least 10 years. A recent VRF installation in Athens demonstrates the company’s capability. This new-build, 3-storey office building of 50 000 m2 for a shipping company has 17 outdoor units of 25 kW each on the roof serving 60 ducted indoor units, each of 14 kW cooling capacity. All outdoor units have two compressors — one fixed-speed and one inverter-controlled to provide variable speed and capacity control. In the UK, the platform for future development is based on a network of six UK distributors and one in Ireland. There are also 1500 contractors in the ‘Product accumulator’ scheme, which Tony Gittings describes as ‘probably the most up-to-date list of air-conditioning contractors in the UK. The company’s own UK resources are being developed rapidly to provide sales, services and technical support. A training facility is being set up in the UK headquarters at Slough, and it will be operational early next year. ‘I have been employed by LG to build for the challenge ahead,’ says Tony Gittings, whose top-end management team includes Gary Potschul as business-development manager and Dave McBain as technical-services manager. They will be supported by a team of about 10, which is rapidly being put into place. Tony Gittings perceives the task as being boosting the value and technology of LG’s VRF product offering and the perception of the brand. ‘We will need to sell technically as well as on price,’ he says. ‘We will offer a technically complete VRF product range at a competitive price. We need to develop a technical approach to the issues to convince consultants.’

Spearheading LG’s drive to develop its position in the UK air-conditioning market: Tony Gittings, general manager (left) and Dave McBain (technical-services manager.

Both direct and indirect sales support are being developed. ‘We have a network of six distributors who are good at what they do. We will be encouraging them to invest inwardly, supporting them in individual development and encouraging excellence.’ On service support, Tony Gittings explains that LG in the UK is recruiting qualified engineers and developing on-site support and commissioning services. Technical support includes technical-support engineers at Slough, distribution support engineers and training support engineers. On training, he stresses, ‘The training centre will give confidence to installers and distributors alike. The facilities at Slough will be similar in scope to those in Milan and Madrid.’ Aggressive The challenge that LG has set itself demands growth of around 15% a year for the next four years. ‘That is an aggressive target,’ says Tony Gittings, ‘but LG is a Korean company, and Koreans are aggressive.’ LG Electronics is aat LG House, 250 Bath Road, Slough, Berks SL1 4DX.
www.lgaircon.co.uk