Korea refrigerator exports are booming even in the Crown and in the middle of winter “126% operation rate”

Admission 2020.12.03 06:00

‘Zipcock’ with Corona … Soaring demand for refrigerators to store food
Supplied to the US market, it benefited from Corona, a manufacturing base in Mexico
Frequent waiting for a month at the Busan port for Samsung and LG Electronics products

The export of domestic refrigerators is increasing significantly. The operation of factories around the world was shut down in the aftermath of the new coronavirus infection (Corona 19), but domestic factories do not have major operating problems. The market share of Samsung Electronics and LG Electronics in the US refrigerator market is also increasing. To keep up with the growing demand, Korean companies are pouring 1.26 times the normal amount of production from their factories.

According to the Korea International Trade Association on the 2nd, up to the third quarter of this year, Korea’s refrigerator exports amounted to $ 570 million (about 630 billion won), up 46.2% over the same period. of last year. The Korea International Trade Association has analyzed that “after Corona 19, the domestic economy (house + economy) has become a new consumption trend and the demand for refrigerators for storing food ingredients has increased”.

◇ ‘Domestic Economy’ Increases Imports of U.S. Fridges … Samsung Increases LG’s Market Share

The Institute of International Trade and Commerce of the International Trade Association recently selected refrigerators as the first target for the “Promising Item AI Report”. It’s a report recommending promising articles and export destinations using artificial intelligence (AI) and big data. The report analyzed nine indicators, including gross domestic product (GDP), population, tariffs, regulations and customs clearance in 58 major countries, and concluded that the sale of refrigerators in the United States is the most promising. Subsequently, France, India and Spain were suggested as promising countries for exporting refrigerators.

Despite the economic downturn, the growth of US refrigerator imports from June to August this year surpassed all rumors. Do Won-bin, a researcher at the International Trade Association, said, “The popularity of home refrigerators is increasing due to the high demand from Americans for customized temperature settings and voice / smart functions for each refrigerator space.” The result of its construction. “

Indeed, the share of Korean companies in the US refrigerator market is also increasing. According to US market research firm Traqline, US refrigerator market share based on sales in the third quarter of this year was 25.5% for Samsung Electronics and 18.5% for LG Electronics. The combined share of the two companies is 44%. This is an increase of 1.7 percentage points compared to 23.8% for Samsung Electronics and 18.5% for LG Electronics in the third quarter of last year. Whirlpool, the third largest in the United States, fell from 16.7% to 15.8% during this period.

Corona 19 represents an opportunity for Samsung Electronics and LG Electronics, which have a high percentage of domestic production. In Korea, the prevalence of infected people is relatively lower than in North America and Europe. While overseas manufacturing bases are creaking with Corona 19, domestic factories are in a state of no major disruption in operation. An official from the home appliance industry said: “Domestic production is also replacing the quantity produced abroad.”

◇ Even in Corona, the Korean factories are “ at full capacity ” … the utilization rate of LG Electronics’ plants is 126%

The US market share of “Korean” refrigerators manufactured and exported to Korea is also growing rapidly. According to the Korea International Trade Association, the market share of Korean refrigerators in the United States from 18% in 2018 was 24.3% as of September this year. This is an increase of 6.3 percentage points. On the other hand, Mexico’s share in the United States dropped from 63.4% to 57% during this period.

Mexico is a country where exports to the US and Canada are easy due to the North American Free Trade Agreement (NAFTA) and many companies operate manufacturing bases. However, it was hit hard by Corona 19, and the factory’s operations and logistics were severely disrupted. In Mexico, the cumulative crown19 confirmed by the 1st reached 1.1 million, 7071. The death toll was 105655. The number of confirmed cases and deaths is the eleventh and fourth highest in the world. There are currently around 12,000 new cases per day.

All major home appliance factories such as Samsung Electronics ‘Gwangju Plant and LG Electronics’ Changwon Plant are fully operational. They are pulling out more of their production capacity through extra work in response to incoming orders. According to LG Electronics’ quarterly report, LG Electronics produced 2,916,000 refrigerators in the third quarter of this year. Production capacity was 2,315,000 units per quarter, but the utilization rate was raised to 125.9% to meet additional orders. That’s 21 percentage points higher than the utilization rate of 104.9% in the third quarter of last year. An LG Electronics official said, “Not only in Korea, but also in the Tennessee plant in the United States, which was completed last year, has a high rate of automation, so the impact of Corona 19 is small.”