LG India inaugurates its second manufacturing unit

Company release, October 6, 2004

New Delhi

Leading Consumer Electronics and Home Appliance brand, LG Electronics India announced the operations of its second Greenfield facility at Ranjangaon, Pune today. The new plant in addition to its current manufacturing facility at Greater Noida, U.P. (on the outskirts of Delhi) will enable the company to expand its consumer reach and ensure better supply chain management that would translate into a faster response time.

The new Greenfield facility is a wholly owned subsidiary of LG Electronics India located at Ranjangaon, 50 km from the city of Pune. Covering over 50 acres, the facility will be manufacturing Color Televisions, Air Conditioners, Refrigerators, Washing Machines Microwave Ovens and Color Monitors by the end of 2005. The plant that involves an investment of Rs.150 Crore (32 million USD) till 2004 will commence operations now. The success in India has been phenomenal and we foresee the Indian subsidiary to contribute to 10 per cent of the total worldwide turnover by 2010. The success is attributed to the employees who have made all efforts to make the company grow strength in strength. The Pune factory is in line with the parent company's strategy of using the Indian subsidiary as an export hub for several South Asian countries," said Mr. S. S. Kim, Vice Chairman & CEO of LGE here today. LG India will become the export hub for LG worldwide catering to the Middle East and African markets. The company aims to touch an export turnover of USD 3 billion by 2010, which will contribute to 30 per cent of LGEIL's turnover. The contribution of mobile phones and IT will be 65 percent while the rest 35 per cent will be from Consumer Electronics and Home Appliances.

Chairman and Chief Executive Officer, LG Corp, Mr. Bon Moo Koo said, "India is an important market and LG India is on top priority for investments. There will be fresh infusion of funds over the next six years from 2005 to 2010, which will be close to USD 250 million. This only reflects our commitment to this market."

Mobile phone plant

With mobile phone segment gaining prominence in India, LG Electronics announced the setting up a mobile phone production in India. The plant is expected to start production by 2005. By 2010, the company aims to produce 20 million units of which 50 per cent will cater to the export market. The facility will involve an Investment of USD 60 million by the year 2010. The company's announcement came in line with its strategy of attaining an overall market leadership in India in GSM market after being leaders in the Consumer Electronics and Home Appliance.

An elated Mr K R Kim, Managing Director, LGEIL said, Prompted by our success in this country, we plan to set up a mobile phone plant in India. It will give us an edge over other players in terms of quality, production and subsequent market share. We are investing close to 2-3 % of our turnover towards research and development of products and hope that we will soon be able to establish India as an R&D hub for Consumer Electronics, Home Appliances and GSM phones."

Vision 2010

"With a strong R&D and export focus, LG India intends to become a USD 10 billion company by 2010 of which 30 per cent will be from exports. With our firm resolution to realize our objectives, we will further consolidate our leadership position in the consumer electronics, home appliances, IT and GSM markets," he added.

About LG Electronics India Pvt. Ltd.

LG Electronics India Pvt. Ltd., a wholly owned subsidiary of LG Electronics, South Korea was established in January 1997 in India. It is one of the youngest consumer durable brands in the country today, encompassing an impressive portfolio of Colour Televisions, Washing Machines, Air-Conditioners, Microwave Ovens, Refrigerators (Direct Cool and Frost Free), PCs, Vacuum Cleaners, optical storage devices and GSM mobile phones. During the seven years of its existence in India, LG has earned a premium brand positioning due to its superior quality, high product performance, revolutionary technological delivery and warm service. In fact, today LG is recognized as a leader in setting industry norms starting with the fastest ever-nationwide reach, latest global technology and product innovation. The company aims to achieve a turnover of Rs 7000 cr in 2004 and an enviable position in the GSM mobile phone market with plans of setting up a new GSM plant at Pune.

For further information, please Contact:

Akanksha Gupta

Corporate Communications

LG Electronics India Pvt Ltd

Handphone: 09811 354 338

Email: akanksha@lgezbuy.com

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Shailaja/ Praveen.

Hanmer & Partners

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