Press Release

Koo Bon-moo, chairman of the LG Group, has set a bold goal in capturing its share of the Chinese market. The pioneering tycoon, best known for his no-nonsense "No. 1 LG" slogan, recently unveiled an ambitious plan to make LG into the best electronics and chemicals conglomerate in China by 2005.

Koo`s aim is to make LG air conditioners, refrigerators and CDMA digital systems and mobile handsets into LG`s top three products in the Chinese market in three years. Koo also revealed plans for massive and aggressive R&D and facility investments in China for the group`s digital display devices, life science, IT materials and other next-generation household goods.

At the same time, LG is in the process of developing its Chinese operations into one of its prime, global manufacturing bases for third-party export markets, such as America, Europe and Asia. "LG is determined to grow into one of the top conglomerates in China by 2005 through aggressive investments and expansion," a top aide to Chairman Koo said.

"In three years, LG`s Chinese operations will grow to the levels of its Korean operations in terms of sales and assets," he said. Korea`s second largest conglomerate expects its group-wide revenue to rise to 120 trillion won (about $100 billion) in 2003, marking a growth of 7 percent from an estimated 112 trillion won last year. LG also aims to increase its ordinary profit by 6 percent to 5.3 trillion won by upgrading the competitiveness of mainstay products, while reinforcing cost and risk management practices.

Localization strategy

The LG Group first advanced into China in 1993, when LG Electronics established a manufacturing company in Huizhou City of Guangdong Province. In 1996, LG Electronics set up its Chinese holding company. At present, 22 LG companies are operating a total of 35 Chinese companies, including 22 manufacturing plants.

LG companies are set to further accelerate their localized management in China this year. "Chairman Koo has recently instructed a full-scale localization of LG`s Chinese operations in preparations for the future. He also stressed Chinese strategies from the viewpoint of China as a companion," said Kang Yu-sig, the group`s chief planning officer. "LG will steadily expand investments and marketing in China, as it will be the world`s biggest growth market and the most competitive manufacturing base in this century," said Kang.

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LG Household & Health Care . a spin-off of LG Chemical, will also step up its marketing campaign at discount stores and cosmetic stores in the two Chinese cities, focusing on high-income clients.

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By Yoo Cheong-mo Staff reporter

(cmyoo@koreaherald.co.kr)