New Delhi: The Indian unit of South Korea's LG Electronics is to spend Rs 1,400 crore over three years to hike capacity and build a third factory, possibly in Chennai, as it looks to step up production in a key market poised to become its second-largest by revenues.

"This year LG India will become a clear No. 3 and over the next few years, will overtake sales in South Korea where the market is flat," said LG Electronics India CEO MB Shin, adding that India is now neck-to-neck with Brazil and Russia as the third-largest contributor to global revenues behind the US and South Korea.

LG Electronics India, though the country's largest consumer electronics and home appliances maker, trails rival Samsung Electronics in sales of certain products such as LCD televisions, where the domestic market is more than doubling in size every year.

LG's expansion plans come after it has set a 45% revenue growth target for 2010, the highest in six years, to generate Rs 19,000 crore in sales. The company sees sales to be largely driven by demand for LCD TVs and GSM handsets.

"The target may appear ambitious but given the demand we have experienced in the second half of last year, it's very much achievable," said Mr Shin. LG hopes to come up with a blueprint on the new plant within six months. The new factory will add to the capacities at its two plants in Pune and Greater Noida.

The company reported a 40% rise in sales in July-December 2009 from a year ago that helped total revenue for 2009 grow 21%, aided by robust sales of home appliances and LCD TVs. LG, whose total sales hit Rs 13,000 crore in 2009, has had a spectacular surge since entering India in 1997, though growth slipped to 10-15% in the last five years as demand waned.