Mar. 8, 2021


Jaime de Jaraíz

Spain

Jaime de Jaraíz

President & CEO, LG Electronics Spain & Portugal

“I hope that more companies will start to develop initiatives to heal the environment.”

BIO

Jaime de Jaraíz is a law graduate with a specialization in labor law from the Complutense University of Madrid and San Pablo CEU. He holds an MBA from the University of Houston, in addition to a PDG by IESE Business School. De Jaraíz joined LG in 2005 as director of the division of consumer electronics and member of the management committee of LG Electronics Spain. He has broad and successful experience in multinationals such as Philips Ibérica, Danone, and Caja Madrid. He has been President and CEO of LG Electronics Iberia since 2015.


With the COVID-19 pandemic affecting all areas of the economy, how has LG evolved over the last year?

We ended 2019 extremely well, and in 2020 things were going well until March. We then suffered heavily right at the beginning of the pandemic due to the lockdown. We managed to balance our sales through e-commerce, though these did not make it up for the loss of in-person sales. After the lockdown, we saw a change that helped us end the year in good shape. People realized they are spending more time at home and that their home is an investment, and they are changing their habits. They are buying larger TV sets and better appliances, and there is growing interest in companies that are socially responsible. We have experienced double-digit growth every month after the lockdown was lifted. If we had had 10 more days to sell, we would have surpassed our 2019 figures.

Has remote working impacted sales of your products?

Yes, everything related to remote working has grown exponentially. Screens for computers have boomed; everything related to computers has grown as well. We have also brought in more products from Asia. We are selling a mask from LG, and air purifiers are also selling well. On top of this, we have products that sanitize via steam. We invented a washing machine that uses steam and ensures that clothes are properly sanitized.

LG PuriCare Air Purifying Mask is a next-generation mask with 2 HEPA filters, fans, and an ergonomic design. What sales estimates does the company have for this product?

I have been testing it for three months, and we have recently obtained the certification. It has two HEPA filters, which protects users from almost every virus, including COVID-19, because the molecule of the virus is bigger than the filters. It is not yet certified for COVID-19 because every single manufacturer is seeking COVID-19 certification, so there is a long waiting list. If the mask is used 10 hours a day, the HEPA filters can be used for an entire month. Another advantage is that it is possible to do sports with it. This mask can significantly protect users from viruses. Our mask is the one in the market that offers the most protection, and it is extremely comfortable to wear.

During our talk two years ago, you mentioned that B2C business is larger than B2B, the latter occupying 20% of the total. The company's goal is to reach 50% by 2025. What is your strategy to achieve it?

We are implementing several strategies. We are entering some businesses, such as vehicle component, and we are already the largest manufacturer of batteries for electric vehicles, having 27% global market share. That is a massive business. The B2B segment is focused on consumer electronics, including solar panels, and we have a strong portfolio of products to digitalize business. We are the leaders in the use of air-based heaters for homes, which are a new evolution in the portfolio of products to keep our houses warm. This can heat water for showers or used to heat homes. This helps us significantly reduce the carbon footprint and generates savings of up to 60% in monthly bills. In Spain, B2C is 25% of our sales, and by 2050 we want it to represent 50%.

What differentiates LG from its competitors in B2B?

In terms of R&D investment, the main developer of air conditioners records sales as high as our total R&D investment. That R&D investment allows us to obtain a significant advantage in the market. We have been present in Spain for 25 years, and that differentiates us, because not all companies have been present in this market for this long. On average, in each Spanish home there are about four LG products; that is how big our market penetration is. People have refrigerators, cellphones, or TVs from LG. LG has a strong market position because it offers better guarantees than others. We are radically against the so-called market obsolesce; the best product is one that lasts for years. If someone buys a refrigerator that lasts 30 years, that means it is a great product.

Smart Green is an LG initiative to plant 47 million trees, using drones, smart seeds, and big data. How has Smart Green evolved since 2019, and what is the support of public administrations?

LG is one of the five largest companies in the world in terms of green investment; we invest heavily in developing electrical products that are efficient in energy terms. Our goal is to ensure that all electrical products in the market are energy efficient. Our products are among the most efficient in the market in every single category. If you compare our portfolio of products with that of our competitors, we are the most efficient. We also sell some solar power panels, which also have storage capacity. The principal element to protect the environment in the short term is to remove the CO2 currently in the atmosphere, and that will be for the next 20 years. To remove that CO2, we need to plant billions of trees, and that would give humanity time to change the economy into a more sustainable model. We will have to make that change as soon as possible; the more time we take, the worse the conditions will be. One of the steps that we must take to reduce CO2 emissions is to reduce consumption; we are consuming at an unsustainable speed, so we should give nature some room to recover. I have been saying we need to make these changes since 2017. We will experience dire consequences because of our current consumption rate model. I hope the CEOs of other companies will start to take action within their businesses to collaborate in this area, which has been traditionally done by social corporate responsibility efforts. Social corporate responsibility should be a core part of a company, because firms should provide products and services for customers that improve the world. Technology-related companies have the capacity to move fast, so we are an important player to achieve this change. We should not just develop products, but contribute to create a better world. I would like more of my competitors to join me in this change. The time is now. I hope that more companies will start to develop initiatives to heal the environment. It could be planting trees or protecting wildlife, for example.

What companies are part of the Smart Green initiative?

About 180 companies are interested in participating. These companies have come to our headquarters. And 10 companies participated in our last tree planting project, which took place in Extremadura. The Smart Green project seeks to plant trees by using drones in order to reach areas that are difficult to access. In addition, the movement calls for city halls to individually participate in a tree planting day. Right now, if we want to mitigate the effects of climate change, we should start by planting trees.

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