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Press Release

09/06/2006

LG Electronics Completes Construction of Russian Plant

- The plant completes production triangle connecting Wroclaw, Mlawa and Ruza to target Europe, Russia and the CIS countries.

- The plant completes production triangle connecting Wroclaw, Mlawa and Ruza to target Europe, Russia and the CIS countries.

- The Chairman and CEO of LG Corporation, the Vice Chairman and CEO of LG Electronics and the Russian prime minister attended the opening ceremony.


LG Electronics, a leader in consumer electronics and mobile communications, has set up a large complex of production facilities in Ruza, Russia, which is near Moscow.

Russian Prime Minister Fradkov Mikhail Efimovich, LG Chairman and CEO Bon-Moo Koo and LG Electronics Vice Chairman and CEO SSangSu Kim attended the opening ceremony on September 5. Approximately 600 Russian and Korean dignitaries were also in attendance, including Mr. Gref, Russian Minister of Economic Development and Trade, Mr. Gromov, Governor of Moscow Province and Mr. Jaesop Kim, Korea's Ambassador to Russia.

LG Electronics invested a total of USD 150 million in the 49.5 hectare complex including the investment by LG suppliers. The facility will turn out 500,000 digital TVs, 700,000 washing machines, 200,000 refrigerators and 260,000 home theatre systems annually. LG Electronics plans to increase the capacity in each category to 1 million units annually by 2008.

LG Electronics is strategically increasing its production capacity in Russia, as the country is expected to join the World Trade Organization (WTO) later this year. The company already has top market share in Russia for TVs, audio equipment, vacuum cleaners, microwave ovens, video components, DVDs and optical storage.

Mr. Ssang Su Kim, Vice Chairman and CEO of LG Electronics, said, "LG will use this plant as a springboard to become the undisputed number one electronics brand in Russia. This plant is the result of successful collaboration between us and our dedicated suppliers. It also would not have been possible without the support we have received from Russia and her people."

The company chose Russia as the location for this plant to better serve customers in the region. LG Electronics can pass on savings on distribution costs and tariffs directly to its customers, while taking advantage of the regions highly-skilled workforce.

In the region, LG Electronics has a digital TV plant in Mlawa, Poland and a LCD TV and side-by-side refrigerator plant in Wroclaw, Poland. These plants make up a production triangle that will allow the company to lead the European and Russia/CIS markets.

LG's Chairman has been actively supporting the development of the business opportunities in Russia

LG Chairman and CEO Bon-Moo Koo expressed his gratitude to the Russian government for its help in expediting construction of the plant. Mr. Koo had dinner with Russian Prime Minister Fradkov Mikhail Efimovich, Russian Minister of Economic Development and Trade Mr. Gref, and Governor of Moscow Province Mr. Gromov after the ceremony.

Mr. Koo has expressed interest in Russia as an emerging market with potential business opportunities for LG, not only electronics business but also other business areas. Before the opening ceremony, he attended the briefing sessions of all LG Electronics, LG Chemical and LG International.

Mr. Koo said, "I expect the opening of this LG Electronics complex in Russia to provide momentum for other LG companies to enter the region. I want to see LG become Russia's top brand."

LG also has chemical business and natural resource probing in Russia

LG Chem's sales revenue in Russia was USD 63 million in 2005, a 70% increase over the previous year. The projection for 2006 is over USD 100 million. LG Chem has been in Russia since 2004.

Another subsidiary of LG Corp., LG International, has been exploring natural resources in Russia. In 2005, the company signed a MOU with ElgaUgol for exclusive rights to a coal mine with an estimated USD 2 billion yield. In July, LG International found an estimated 20 million barrels of oil after probing ADA mining area in Kazakhstan. The company took another concession in the Bloc 8 mining area in August and plans to further develop its resource exploration business in Russia.

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