Press Release

11/01/2007

LG Advances into the Energy Solution Business

LG, the World's Leading Air Conditioner Manufacturer,

LG, the World's Leading Air Conditioner Manufacturer,
Advances into the Energy Solution Business

Seoul, Korea, November 1, 2007 - LG Electronics (LG), a global technology leader and pioneer in home appliance convergence as well as the world's leading air conditioner manufacturer, announced today that the company plans to expand into the energy solution business to actively respond to energy and environmental issues. Through this move, LG expects to achieve sales of USD 7 billion by 2010. The company also expects its proportion of sales of commercial air conditioners will increase from 30 percent of its total air conditioner sales to 50 percent by 2010.

"By combining our new energy solution business with our industry-leading air conditioners, we are not only actively responding to energy-efficiency and eco-friendly needs in the marketplace but also developing a new growth engine for future business," said Young Ha Lee, President & CEO, Digital Appliance Company, LG Electronics. "Eco-friendly and energy efficient products are becoming more and more important due to increasingly higher oil prices and dramatic climate change. LG originally announced its eco-friendly management strategy in 2005, and this is now the next step."

Starting next year, LG will diversify its business by launching energy solution services and energy-efficient systems. LG plans to begin an energy consultancy, which will be customized to help different customers develop their own eco-friendly management. LG will work with customers through the entire process of establishing an energy system for public buildings, from suggestion to planning, ordering, operational supervision and maintenance of the energy system. In addition, LG will reinforce its research and development capabilities by collaborating with other companies and academic institutes, and will increase the number of sales personnel specialized in engineering and research and development personnel by 40 and 70 percent, respectively.

LG has showed enormous growth in the residential air conditioner market, especially in overseas markets, and has been the world's largest residential air conditioner manufacturer for seven consecutive years. Meanwhile, LG has also expanded its market share in commercial air conditioner markets thanks to its high energy-efficiency technology.

LG has already developed innovative hybrid energy solution systems such as Hybrid COGEN and Hybrid XEO, which has demonstrated the company's capabilities in energy savings and cost reduction. Recently launched, Hybrid COGEN simultaneously generates electricity and heat utilizing liquefied natural gas (LNG). Hybrid COGEN uses 32 percent less energy while also reducing the emission of environmental pollutants such as CO2 gas. Hybid XEO, a hybrid air-conditioning system, combines a highly efficient energy-saving inverter system air conditioner with geothermal heat pumps, one of the most innovative renewable energy solutions. Hybrid XEO reduces energy consumption by approximately by 30 percent annually.

According to the World Market for Air Conditioning 2006, a market research report published by the Building Services Research and Information Association (BSRIA), the air conditioner market will grow to USD 65 billion by 2010, while the energy solutions market, including solar, wind and geothermal energy, will grow to USD 75 billion.
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