LG Hausys expands its production plant for insulation products

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1 LG Hausys expands its production plant for insulation products Invests KRW 55 billion in its Oksan plant in Chungcheongbuk-do, production capacity expected to increase more than two-fold Our company is expected to increase its production capacity for insulation products used in construction (PF insulation). This is an attempt to meet soaring demand for LG Hausys insulation products, which have gained popularity thanks to outstanding insulation performance and fire-preventing safety features. With the production boost, our company is looking ahead to lead the overall high-performance insulation product market. A total of KRW 55 billion will be invested in the Oksan plant in Chungcheongbuk-do to expand the production line for PF insulation products. Production line no. 3, which will become the newest addition to Oksan plant no. 2 (opened last May), will come on line sometime during the first quarter of 2020 with an annual production capacity of 10,000,000m2. Once complete, our company s overall production capacity for PF insulation materials will increase from 9,000,000m2 to 19,000,000m2 more than twice its current capacity. In particular, the productivity of production line no. 3 will be 40% better than existing production lines. This means, our company will have the best manufacturing capacity for PF insulation products in the industry. At present, PF insulation materials are produced by four companies around the world LG Hausys, Sekisui and Asahi Kasei from Japan, and Kingspan from the UK. Our company is expected to upgrade the productivity of production lines no. 1 and no. 2 within the second half of this year as part of its efforts to innovate the manufacturing capacity of existing production facilities. 1/12

2 Meanwhile, our company was the first company in Korea to mass produce PF insulation materials and entered the high-performance insulation materials market in October Our company s PF insulation materials boast the best insulation performance among all insulation materials produced in Korea for construction purposes. Our products are popular in the market thanks to semi-flame retardant and fireproof characteristics. Decorative Materials Business Managing Director Park Gwi-bong said, Demand for highperformance insulation materials continues to grow due to the enforcement of more stringent regulations on insulation performance and fire safety. To respond to such demand, we opened our plant no. 2 for PF materials in May, and immediately followed that up with decisive investment to add a third production line. We expect to become the leader of the high-performance insulation products market, and contribute to better fire safety and energy efficiency in buildings across the country. 2/12

3 LG Hausys launches high-end commercial tile product PRESTG Our company recently launched PRESTG, a premium-grade commercial tile product that mimics the luxurious texture and feel of real hardwood and marble to perfection. PRESTG uses a technique called the Continuous Embossed in Register (C-EIR) which aligns the physical grain of the hardwood pattern with the indentations of the surface materials to recreate an even more realistic texture of real wood. Compared to existing products, patterns have been increased to twice their previous size to minimize repetition and to help mimic the grain of natural materials even better. Print resolution has also been increased by 160% compared to previous products. This is expected to improve the vividness of patterns, and the rich colors will recreate minute texture details of natural materials as closely to the original as possible. Moreover, PRESTG uses a unique surface treatment technology for reinforced scratchresistance. This will help minimize scratches and contamination from everyday use. In particular, PRESTG can be installed over existing deco tiles and mineral-type flooring that are fixed to the floor, meaning consumers can save time and money by finishing everything from installing the product and tidying up the scene in a single day i.e. oneday installation. Our company also launched PRESTG CLICK, a product that can be installed using a clicking mechanism (floating installation). Similar to PRESTG, the C-EIR technology was used, and the product can be installed over the existing floor which means consumers can revert back to their original floor if they decide to remove PRESTG CLICK. Thanks to a noise-damper layer, noise is reduced by 19dB, and the product does not suffer from any distortions even when exposed to moisture or water. 3/12

4 LG Hausys launches the first recycled PET bottle furniture film in Korea Company expects to recycle 15 million bottles per year and help reduce the amount of disposable plastic waste Our company launched Recycled furniture film, an eco-friendly product made with recycled PET bottles. Recycled furniture film is the first of its kind in Korea. This furniture film can be laminated onto the surfaces of plywood (MDF/PB) used for furniture to create various designs. The film can also be laminated onto marble or metal surfaces to add a diverse range of patterns and either a matte or glossy texture. This makes it perfect for several different types of furniture items, including kitchen sinks, closets, and desks. To date, the furniture film industry has avoided using recycled PET (Polyethylene terephthalate) in furniture films due to problems such as color and quality deviations resulting from impurities contained inside PET bottles, and stripping where the film would peel off from the plywood it was laminated onto. However, our company utilized in-house technology that optimizes product structures to overcome stripping issues and color/quality variations that plague furniture films produced with recycled PET bottles, and successfully began mass production. Moreover, our company is in the process of acquiring a patent for the technology used in the recycled furniture film product. Due to the high degree of technical difficulties, only one other company (Japanese corporation) in the world uses recycled PET to manufacture furniture films. Meanwhile, back in 2012, our company launched the first furniture film made with PET that satisfied safety standards required for food and beverage containers in Korea. Ever since, it has led the Korean furniture film market, and thanks to its recent addition manufactured using recycled PET, our company further proved its technological prowess to the world. 4/12

5 Our company is currently vying for supremacy in the global furniture film market, which is estimated at approximately KRW 400 billion, with a Japanese rival. The meaning of being eco-friendly has now expanded in scope to encompass not only the reduction of harmful materials, but also the recycling of resources. As such, our strategy is to use the recycled furniture film to solidify our company s position as the no. 1 producer of furniture film products. Surface Materials Business Managing Director Kang Shin-woo said, We will supply our recycled furniture films to global furniture manufacturers in Europe and North America, most of which are expanding their range of eco-friendly products. We plan to use our outstanding eco-friendly technology to pursue sustainable growth that takes care of our planet and our environment. 5/12

6 LG Hausys adds production line no. 3 for E-Stone products in its US production plant Invests USD 50 million in its Georgia plant, new production line expected to add 350,000m² Our company will invest a total of USD 50 million in its artificial marble production plant located in Georgia, USA, to add a third production line for premium-grade artificial marble E-Stone (engineered stone) products. E-Stone is a premium-grade artificial marble product primarily made with natural quartz (approximately 90%). On the outside it appears the same as natural marble, however it is better than natural marble in terms of machineability, and durability. As such, our E-Stone products are used in a variety of places, including various information desks, counters, and walls at commercial facilities. With the North American market spearheading the increase in demand for premiumgrade natural stone materials (e.g. E-Stone), our company added a second production line to its Georgia plant in the second half of Now, it is following that decision up with more decisive investment to add a third production line. The newly planned production line no. 3 will produce 350,000m2 of product per year, and is expected to come on-line by December Once complete, our company s overall production capacity for E-Stone will increase by 50%, going from 700,000m2 to 1,050,000m2. In particular, line no. 3 will include more sophisticated robotic equipment, enabling it to produce a variety of E-Stone product designs that mimic high-grade natural marble even better than before. 6/12

7 Since opening our E-Stone factory in America back in 2011, our company has been operating under the brand name Viatera. In April of last year, our company also established its North American sales corporation in Canada as part of a fully localized production and sales strategy. Thanks to these efforts, Viatera sales have grown by more than 20% per year. Surface Materials Business Managing Director Kang Shin-woo said, The global market for E-Stone (engineered stone) products is currently estimated at KRW 3 trillion. Among all regional markets, the North American market is the most important as it accounts for more than 70% of the global market. With our latest plans to further expand our production capacity, we will accelerate our timeline with regards to the North American market and continue the upward trend for sales. In doing so, we will lay the foundation for our company to become the leading company in the North American market. Meanwhile, the global E-Stone (engineered stone) market is dominated by three companies - Cosentino in Spain, Caesarstone in Israel, and Cambria in the USA. Our company currently sits in fourth place. 7/12

8 Our company improves cost competitiveness and productivity, develops new EIR technology with manufacturing innovation initiatives! Catching three birds with one stone! Currently, numerous real estate experts in Korea are predicting a downturn in the real estate market with fewer new apartments expected to hit the market during the second half of this year, and new real estate policies to be enforced by the government. As such, it seems our company s construction materials business will inevitably be affected to a certain degree by such market conditions. To minimize the impact of such challenging external business conditions, our company is focusing on manufacturing innovation aimed at improving various capacities of our company as a whole. In particular, the Decorative Materials Division-Ulsan-Decorative Materials Production Team (hereinafter referred to as the Decorative Materials Production Team ) at our company s Ulsan plant has been executing its own manufacturing innovation initiatives to simplify production processes and boost productivity. So far, the Decorative Materials Production Team has been able to reinforce the cost competitiveness of sheet-type flooring products and apply the Big Size EIR technology for the production of sheet-type flooring materials (PVC) featuring high-quality design, yet reasonable price. 8/12

9 Extreme innovation that improves cost competitiveness and productivity simultaneously! The Decorative Materials Production Team set its priority on simplifying the EIR process and improving cost competitiveness, as well as productivity at the same time. It turned the process of producing secondary semi-finished products into an in-line process and successfully reduced its production cost. Also, the Decorative Materials Production Team decided to recycle raw materials to cut down on losses. This resulted in a significant boost in terms of cost competitiveness. Problem-solving workshop to achieve manufacturing innovation The Team hosted regular Manufacturing innovation problem-solving workshops to think about ways to reinforce cost competitiveness and upgrade productivity. In addition, each and every Team member came together and built a consensus to help the Team execute plans quicker. Which one is made with real hardwood? The following images show the designs of our company s flooring products currently available on the market. One is a hardwood floor made primarily with wood/plywood, while the other is a sheet-type flooring product made with PVC. Just looking at the pattern, can you tell which is the hardwood floor? 9/12

10 Among the two images above, one is a real hardwood floor and the other is a sheet-type flooring product (PVC) The one on the left is the real hardwood floor made of real wood/plywood, and the one on the right is a sheet-type flooring product made primarily out of PVC. Although the product on the right is not real wood, its design is sophisticated enough that it appears no less real when compared to any hardwood floor. Real wood-like design created thanks to Big size C-EIR technology! The Decorative Materials Production Team has invested significant amounts of time and effort into a technology called C-EIR which is capable of maintaining the reasonable price levels and quality of sheet-type flooring products, while improving design. ( EIR technology: the wood pattern/grain matches the embossed areas of the surface, and patterns are repeated less frequently which produces a more realistic wood grain design and texture) This technology is currently owned exclusively by our company. Our company s exported commercial flooring product ( Wood Collection ) that uses the EIR technology from the Decorative Materials Production Team 10/12

11 The Decorative Materials Production Team applied its EIR technology on the Wood Collection, commercial flooring product that our company exports overseas. Thanks to the new technology, Wood Collection now mimics hardwood floor even better. Yet, it remains reasonably priced and easy to install, making it immensely popular in overseas markets. Decorative Materials Production Team meeting Also, the Decorative Materials Production Team used the Big size EIR technology which features larger patterns on the print roll for sheet products than before. Compared to existing standard flooring products, the increased pattern size makes the interior space look larger and adds a natural, premium feel. Flooring product inspection During this process, the size and weight of the sheet rolls increased significantly, causing multiple problems. However, the Team developed field solutions and overcame all of them swiftly. As a result, the Decorative Materials Production Team was able to apply the Big size C-EIR technology to our company s New Cheongmaek, ZEA Sarangae, and ZEA Sorijam products and upgrade them in terms of product quality. 11/12

12 Finding answers from field-oriented manufacturing innovations! The Decorative Materials Production Team believed that answers were in the field. Therefore everyone worked together to develop field-oriented manufacturing innovations. Department heads and squad leaders gathered every day to discuss production rates and quality levels. Also, the Team hosted meetings for task force teams regarding quality issues in the field to improve quality and cut down production costs. Each member of the Decorative Materials Production Team engaged in the Team s innovation initiatives systematically and proactively to achieve the difficult task of improving design and productivity simultaneously. Awards for outstanding task force teams The Decorative Materials Production Team has left a positive imprint on improving the design of sheet-type flooring products, cutting production costs, and elevating productivity with its Big size EIR technology, which is difficult for other companies to replicate, as well as various manufacturing innovation initiatives aimed at reinforcing cost competitiveness. We look forward to the efforts led by the Decorative Materials Production Team in helping our company become the leader not only in the domestic market, but also the global flooring materials market with even more diverse designs and even better quality. 12/12