LG invests in its cosmetics factoryLG Household and Health Care announced on Tuesday a plan to invest 389.3 billion won ($361.4 million) in its cosmetics factory in Cheongju, North Chungcheong.
The company said in a regulatory filing that the investment is aimed at expanding its existing manufacturing facility and establishing a distribution center. LG plans to finish construction by 2020.
The company also announced record earnings for the first quarter of the year.
The beauty company recorded sales of 1.6 trillion won and operating profits of 283.7 billion won in the first quarter of the year, increases of 6.5 and 9.2 percent each from the same period in 2017.
“In both sales and operating profits, we managed to record consecutive growth for four quarters for 13 years straight,” the company said in a statement.
LG Household and Health Care has three businesses categories - beauty, daily necessities and beverages.
This quarter’s growth was led by its beauty business and the continuing momentum behind LG’s premium brands like The History of Whoo, Su:um and O Hui.
The company’s beauty brands had 947.7 billion won in quarterly sales and 212 billion won in operating profit, jumps of 12.1 percent and 20.1 percent from the first quarter of 2017. In particular, the performance of The History of Whoo, was outstanding - the brand’s sales grew 35 percent compared to last year.
The results may come as a surprise to many who thought local beauty brands were badly affected by the recent loss of Chinese consumers. After Korea installed a U.S. antimissile system last year, China stopped its citizens from entering Korea in group tours and Chinese consumer sentiment turned against Korean products.
Analysts say that the impact of China’s retaliation on LG was relatively small, thanks to a brand portfolio in China centered on premium, luxury brands, with The History of Whoo at the lead.
The company’s beverage department, which produces the local versions of Coca-Cola and Sprite, saw sales grow by 5.7 percent to 316.8 billion won and had a 5 percent increase in operating profits to 29.8 billion won.
On the other hand, the company’s daily necessities business was not so great. Quarterly sales retreated year on year by 4.5 percent to 394.7 billion won and operating profits fell by 23.8 percent to 41.9 billion won, as the company made investments to restructure its local business and expand its presence abroad.
BY SONG KYOUNG-SON [firstname.lastname@example.org]