The Korean brand name of LG (previously Goldstar) is well known in the consumer electronics area where its quality, modestly priced, TVs, DVRs, CD players, etc, have made significant impact in terms of local sales. LG Industrial Systems is less well known, although it is a major player in the PLC, variable frequency drive (inverters), remote I/O and HMI marketplace.
Although LG had had a distributor for its industrial products in South Africa since the early nineties, no real effort had been made to promote the product line, until Cape-based systems integrator Ana-Digi Systems recognised the potential.
Ana-Digi traces its roots back to 1985 when it was started by Keith Gross, who had decided to do his own thing, after several years of working at the University of Stellenbosch. Keith established the company as an integrator of systems for all of the established vendors including Siemens, ABB, Möeller-Electric and Allen-Bradley, and created a niche for the Lenze range of frequency inverters in the mid 1980s. Ana-Digi continues to support its installed base of Lenze inverters, Möeller and other PLCs in the Cape region.
The company was introduced to the LG product range in 1991 and successfully introduced the equipment to many local companies. By 1999 Ana-Digi was selling most of the LG product imported into this country and the equipment installed had a zero failure rate. An approach to LG saw the company appointed as a parallel distributor in 2000, but the sales growth for the Korean company was so impressive that, in the same year Ana-Digi was appointed as the sole official representative in South Africa, paving the way for a more concentrated and effective marketing strategy.
The transformation of the new LG agreement was completed in late 2002, with the establishment of LG Industrial Systems, South Africa (LGISSA). Although also managed by Keith Gross, LGISSA operates as an entirely separate company from Ana-Digi, the latter continuing to play a role in systems integration, albeit with the major focus now being the LG system range. In order to level the playing field and ensure fairness the buying conditions for Ana-Digi are exactly the same as those for any other distributor.
LGISSA offers a comprehensive portfolio of products that include PLCs, frequency inverters, human machine interfaces and I/O devices. A complete package including panels (manufactured by external contractors) and wiring schedules is available. A major benefit of the LG products is that they operate under open protocol and communicate easily with Ethernet, Device-Net, Profibus, MODBUS and others, thus providing universal compatibility.
All the software required for operation of the LG systems is supplied free of charge and comprehensive training is offered by both the Cape head office and the local distributors. The warranty conditions offered by LG are generous, with unit replacement free of charge during the one-year guarantee period. This does not of course include damage caused by operator error, but even here, excluding fire or water damage, the faulty unit will be replaced during the warranty period at just 50% of the ruling list price.
LGISSA presently holds stock in Cape Town with a value in excess of R2,5 million. Keith Gross is convinced that being able to supply ex stock has been a major competitive edge. Stock is controllable using the fact that LG dates each item supplied and the local company has introduced a colour coding system based on that used for resistors that ensures that first in is first out. In the event that devices are not in stock locally, delivery from LG in Korea is on average seven working days, while technical support is first class, with answers to e-mailed queries being usually received first thing the next morning (Korea is seven hours ahead of SA).
In terms of the agreement with LG International, the local company is responsible for the whole of the African continent. To date LGISSA has been consolidating its South African distributor network and has representatives throughout the country in Germiston, Vanderbijlpark, Nelspruit, Pinetown and Port Elizabeth. Ana-Digi itself acts as a distributor for the Western Cape region. As from 2003 the company will be expanding into the rest of Africa, the initial focus being on Mozambique, Namibia and Angola. In addition to the distribution network LGISSA has integrators throughout the country specialising in LG systems.
Despite its relatively short exposure to the industrial market LGISSA has an impressive list of customers that includes the likes of Mercedes Benz, MacSteel, Robor, Glaxo SmithKline, Distell and KWV. Keith Gross intends to expand the market penetration for the LG brand even further and his immediate goal is to take 10% of the PLC market within the next four years, a realistic target bearing in mind the recent growth in local business. The company has now outgrown its existing premises and targeting a further growth in stock held and an increase in staff from the current complement of eight, LGISSA is seeking new premises. Naturally the Cape will remain the home base with the distributors looking after the more industrialised northern provinces.
LG International is of course one of the 'Asian tigers'. Starting off in the chemical field in 1947 the company expanded into electronics during 1958 and today is also active in the refining, finance and service industries. It is a US$ 81 billion business operating on a global basis with a staff complement of some 130 000. The name for the electronics and telecommunications business units was changed to 'LG' during 1995 in order to create a powerful and clear corporate identity. LG is currently the third largest Korean corporation.
As for LG itself, the company really lives up to its quality ideals. This has resulted in the virtually zero failure rate of their industrial systems installed locally since 1991, with only one inverter failure being reported and that occurred under extreme environmental conditions. The LG quality system ensures that even ICs (manufactured in another division of the company) are X-rayed to ensure integrity of solder joints. All industrial systems are subjected to lightning, vibration and environmental testing, and every system (not just a statistical sample) undergoes burn-in for a fixed time period before being shipped.
Like all global players in the instrumentation and control field LG International continues to develop and release new product ranges. Next in line for release towards the end of 2003 is the new Soft PLC (software-based) that will eventually make the traditional PLC obsolete. The technical staff of LGISSA will be in Korea early in 2003 to come up to speed in terms of this new revolutionary technology, with local distributors and installers being trained on the new system well in advance of its release. Peter Gross, the son of the founder and a recent Stellenbosch electronics graduate, is training and support manager, and he will personally be handling technology transfer in terms of the 'soft' product line.
For more information contact Keith Gross, LG Industrial Systems South Africa, 021 948 1452, [email protected], www.anadigi.co.za
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