The FINANCIAL — Seoul and Tokyo, July 11, 2011 — LG Electronics Inc., and Hitachi Plant Technologies Ltd. have agreed to establish a joint venture in the water business.
LGE, Hitachi Ltd., and Hitachi Plant Technologies will combine LGE's strength in marketing, planning and manufacturing technology with the Hitachi Group's technological and engineering strengths in water treatment systems and information control systems, to expand in the water business.
The joint venture company, LG-Hitachi Water Solutions Co., Ltd. is scheduled to be established in October 2011, with LGE providing 51 of the capital and Hitachi Plant Technologies 49. The new company will initially focus on manufacturing and sales of water treatment equipment, EPC for water treatment systems and O&M for water treatment facilities, centered mainly on wastewater treatment facilities and drinking water and sewage treatment facilities in Korea, and research and development of water treatment technology. The joint venture will also plan for future expansion in the water business in other countries.
Freshwater resources around the world vary greatly from region to region. Water resources are limited, and their supply is expected to come under pressure on an international scale due to population growth, economic growth, global warming, urbanization, and water environment pollution. As a result, concern about future water shortages is mounting.
The decision to enter into the joint venture reflects LGE's desire to make use of the Hitachi Group's extensive experience and know-how in order to enter the water business, which is expected to expand around the world. The Hitachi Group's seeks to further expand in the water-business and will benefit from LGE's marketing strength and sales channels in Korea and LGE's high-level standardization and mass manufacturing technology in water treatment equipment and systems.
LGE's water business, which started with domestic water purifiers, has recently extended into development of various types of membranes. The company intends to leverage these core technologies to achieve further expansion and development of a total water business.
The Hitachi Group has been involved in the water business for almost one century, and has excellent sales results both at home and abroad. The Group established a Water Environment Solutions Division on June 1, 2010, which will operate under the direct supervision of the president of Hitachi, to develop and propose overall business strategies for growth in this field. The Hitachi Group positions its water business as an area of growth with potential for social innovation business. The Group's objective is to bring to emerging nations in Asia, the Middle East and other areas comprehensive solutions based on sophisticated technology, experience and expertise in advanced water circulation systems, particularly membrane and biological treatment systems that employ information technology. The Hitachi Group is striving to expand its overall water business operations to reach sales of 200 billion yen in the fiscal year 2015.