Samsung Electronics Establishes Korean Subsidiary of FlaktGroup After 2.4 Trillion Won Acquisition... Targets Data Center HVAC Market

Lim Sungtaek Appointed as Inside Director

Samsung Electronics has officially established the Korean subsidiary of FlaktGroup, a European company specializing in heating, ventilation, and air conditioning (HVAC) systems, which it acquired last year for approximately 2.4 trillion won. The company is accelerating its efforts to target the high-value-added cooling solutions market.

According to industry sources on May 11, Samsung Electronics established FlaktGroup Korea Co., Ltd. in Yeongtong-gu, Suwon, Gyeonggi Province, on May 4. The business objectives of the subsidiary include the development, manufacturing, and maintenance of industrial and commercial air conditioning systems, as well as equipment related to data centers and clean rooms. Lim Sungtaek, Executive Vice President of the Air Solution Business Team in the Digital Appliances (DA) division at Samsung Electronics, will serve as an inside director.

FlaktGroup, which Samsung Electronics acquired last year, is a provider of centralized air conditioning and precision cooling solutions with more than 10 global production bases. Through the establishment of this subsidiary, Samsung Electronics is expected to combine its global network with domestic technical expertise.

The reason Samsung Electronics is focusing on the HVAC business is due to sluggish performance in TVs and digital appliances. This year, the combined operating profit of Samsung Electronics' Visual Display (VD) and Digital Appliances (DA) divisions has plummeted to around 200 billion won—just one-third of the previous year's figure—and the company posted a loss in the fourth quarter of last year. Earlier this month, Samsung Electronics also officially decided to discontinue sales of certain businesses, including TVs and digital appliances, in China. As a result, this move is seen as part of a business restructuring strategy and a "selection and concentration" approach to accelerate its HVAC business.

Samsung Electronics also announced during its first-quarter earnings conference call that it plans to use FlaktGroup to expand into the North American market—the largest market—as well as the Korean market. However, the company clarified that it has not yet finalized plans to build a domestic factory.

Samsung Electronics introduced its heating, ventilation, and air conditioning (HVAC) products at the 'Asia Air Conditioning Conference' last year. Samsung Electronics

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