FRANKFURT - New solar installations reached a fresh record of 7.5 gigawatts (GW) in Germany in 2011, playing into the hands of advocates for steeper cuts in tariff subsidies to reduce growth of solar power and the resulting higher costs for consumers.
LG Elec watching GE appliance unit sale plans: CEO
SEOUL (Reuters) -- The chief executive of LG Electronics (066570.KS) said on Tuesday the company was closely watching developments surrounding the potential sale of General Electric Co.'s (GE.N) appliance unit, but declined to say more.
General Electric confirmed this month it may sell or spin off its century-old appliances division, which last year generated revenue of $7.2 billion.
The unit is estimated by analysts to be worth $4 billion to $8 billion. LG, the world's top maker of household air conditioners, has been talked about as a potential suitor, along with China's Haier Group.
"(The planned sale) has the potential to change the structure of the world's appliance industry," Nam Yong, chief executive officer of LG Electronics told a news conference aimed at unveiling a business portfolio revamp over the next five years.
Nam added he had no plans to meet with GE CEO Jeffrey Immelt, who is visiting South Korea.
The LG reorganization process will include withdrawing from some areas, expanding outsourcing and entering new businesses related to energy, the environment and healthcare.
Nam declined to specify which areas LG was planning to withdraw from. Decisions would affect businesses generating no profit or showing no prospect of entering the world top 3 by 2010.
Nam said LG had no intention of abandoning its ailing plasma screen business as long as it was cash-flow positive. He added, however, that LG would not be making any significant capacity investment into plasmas.
Through the reorganization process, LG said it expects to achieve 10 percent sales growth and a 6 percent operating profit margin. David Jung, LG's chief financial officer, said the objective could be met as early as 2010.
LG in 2007 posted a 3 percent operating profit margin on a global basis, which includes the company's performance overseas.
Nam said LG's reorganization plans could include mergers and acquisitions, which his company has so far avoided.
"Most large companies consider organic and inorganic growth options," Nam said. He said the company had decided to enter the solar energy business and was reviewing whether to invest on its own or acquire a company.
Nam said LG was also interested in the commercial air conditioner business, which comes with higher profitability than household air conditioners.
Nam reiterated that his company was not interested in Hynix Semiconductor Inc (000660.KS), the world's second biggest memory chip maker, majority owned by domestic banks.
"There is no specific reason why we should own a fab," he said, referring to the fabrication lines required in the manufacturing of semiconductors.
Shares in LG closed down 1.07 percent at 139,000 won, trailing the wider market's .KS11 1.37 percent rise and tech giant Samsung Electronics' (005930.KS) 3.39 percent gain.
LG on Monday tumbled more than 8 percent at one point on market talk that world No.1 mobile phone maker Nokia (NOK1V.HE) may cut its handset prices and re-enter South Korea in the second half of this year.
(Reporting by Marie-France Han; Editing by Jonathan Hopfner and Keiron Henderson)
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