South Korea's LG Electronics is considering making Malaysia its regional logistics center for Southeast Asia but has no plans to set up a manufacturing base here, a report said today.

The managing director of LG's Malaysian operations, IG Kim, told the New Straits Times that the company would conduct an in-depth study on the viability of Malaysia as its regional logistics hub.

"We are considering Malaysia to deliver LG products to the rest of the region, taking advantage of the Asean Free Trade Area (Afta). We will come out with a more concrete plan later," he said.

LG Electronics set up its Malaysian subsidiary in the middle of this month. It currently has an assembly line in Port Klang outside the capital Kuala Lumpur for a range of products including refrigerators, washing machines and television sets.

Kim said LG Electronics projected sales of about RM800 million this year, rising to one billion in 2006 and RM1.5 billion by 2007 to make it the top consumer electronics company in Malaysia by then.

"We hope to break-even in two years," he said.

Asked if LG would establish a manufacturing base here, Kim said: "It is too early ... we are more into the setting up of the logistics centre here."

The company has earmarked RM60 million for investment in marketing activities and customer services this year, and plans to spend the same amount next year, he added.