Daewoo Set To Become Worlds Biggest Tv Maker

Chairman Bae Soon-hoon said Daewoo would invest the money over the next four years to produce items such as glass bulbs for television tubes, making it the worlds biggest TV maker, with annual production of more than 15 million units.

The investment is expected to create about 5,000 jobs there, Bae told a news conference on Thursday.

The French government announced on Wednesday it would sell the state-owned defence and consumer electronics group Thomson SA to Lagardere Groupe, which in turn will sell Thomson Multimedia to Daewoo.

The French Prime Ministers office said Daewoos offer entailed a commitment to preserve Thomson Multimedia jobs in France and create additional jobs.

 

All the French jobs at Thomson will be preserved and we will focus on cutting production costs by 10 per cent for the normalisation of operations, Bae said.

Employment is a big issue in France and we will do our utmost to create new jobs there with steady investment.

Bae estimated annual global television demand of slighly more than 100 million sets.

Daewoo would buy Thomson Multimedia for a symbolic FFr 1 while taking over its debts, now estimated at about FFr16 billion ($3.07 billion), Bae said. Thomson Multimedias assets were worth FFr24 billion, he said.

But Bae said the debt was expected to be significantly reduced because the French government planned to inject about FFr11 billion into Thomson SA. He said he hoped a large part of that money would go into the mulitmedia unit.

Daewoos deal in the latest in a series of massive South Korean investments in Europe designed to get behind European trade barriers and move closer to consumers.

This month Hyundai Electronics Industries Co announced a $1.5 billion semiconductor plant in Scotland. In July the LG Group said it would spend $2.6 billion on semiconductor and consumer electronics facilities in Wales.

Korean firms want to override trade barriers and Europe needs cash to create jobs, said Hyundai Securities analyst Park Chan-yup.

The French government will take a final decision on the Thomson sale after studying the privatisation commissions conclusions and legal opinion.

Bae dismissed suggestions that Daewoos purchase of Thomson Multimedia could pose management problems. I dont think it is an ailing company, even though I see some room for improvement in efficiency.

Thomson Multimedia posted a FFr1.09 billion net loss in calendar 1995 on turnover of FFr36.5 billion, according to a statement from Daewoo.

Televisions made up 42 per cent of Thomson Multimedias 1995 sales, while video-cassette recorders and TV picture tubes each accounted for 15 per cent of sales, the statement said.

Daewoo Electronics, a unit of the Daewoo Group, posted net profit of 47.2 billion won in calendar 1995 on turnover of 3.13 trillion won, compared with 34.8 billion profit on 2.5 trillion won turnover a year earlier.

Daewoo operates three factories in France, with a total investment of $182 million, making microwave ovens, colour TVs and picture tubes.