LG Electronics Inc. has established a research and development (R&D) subsidiary in Indonesia under a strategy to create a structure that encompasses product development, production, and sales within the Southeast Asian country.

LG Electronics announced that it held an opening ceremony on Thursday for the R&D subsidiary in Chibitung, Indonesia.

Lee So-yeoun, head of LG Electronics’ R&D in Indonesia, has been appointed to lead the subsidiary.

The new R&D center is located just 3.5 kilometers away from LG Electronics’ production entity in Chibitung. It is also about 40 kilometers away from Jakarta, the capital city, where the sales subsidiary is located.

The R&D center, which is under the Home Entertainment (HE) division that is responsible for TVs within LG Electronics, will be in charge of TV R&D.

The need for a local R&D center had increased with the diversification of products manufactured at the Chibitung production subsidiary, LG Electronics’ TV production hub in Asia.

At the end of last year, LG Electronics launched a new unit to take charge of product development in Indonesia under the HE business division through an organizational restructuring.

The establishment of the latest subsidiary is expected to accelerate the company’s global TV business.

Currently, LG Electronics produces TVs, monitors, and digital signage in Chibitung, and refrigerators in Tangerang, located northwest of Jakarta.

The Chibitung production subsidiary recorded sales of approximately 3.2 trillion won ($2.44 billion) last year. LG Electronics also plans to gradually increase the core workforce of the R&D subsidiary, with a goal of expanding it to around 500 employees by 2025.

To secure specialized personnel, the company is considering introducing collaborative programs with local universities and other academic-industry partnerships.

“We will develop models aimed at the global market by establishing infrastructure similar to that of the domestic market,” said an unnamed official from the company. “We will also secure cost competitiveness through localization.”

Park Hyoung-sei, president of the HE division, noted that “with the establishment of a local integrated business structure that encompasses production, sales, and service, LG Electronics‘ global display industry competitiveness will be further enhanced.”

By Lee Sae-ha and Chang Iou-chung

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