LG 2001 Annual Report Download - page 29

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With a 28% growth in sales
reaching 5 trillion won and
a 25% rise in operating
profit to 602 billion won, or
a 12% operating margin,
Digital Appliance Company
has never been stronger.
Digital Appliance
2001 Review & 2002 Strategy
With a 28% growth in sales reaching 5 trillion won and a 25% rise in operating profit
to 602 billion won, or a 12% operating margin, Digital Appliance Company has never been
stronger. Our air conditioners captured the number one global market share and were
named “product of the year” by Consumer Report magazine. LGE refrigerators finally
surpassed the 1 trillion won mark in sales, with our Duo model being named a runner-up
in “IDEA 2001” in the U.S. Our air conditioners, refrigerators and washing machines all
won the Australian “Galaxy Energy Award.” This kind of worldwide acclaim and increase
in brand recognition is only one factor that has propelled us to the top of global appliance
markets. Intelligent selection of production sites, six sigma efficiency strategies, and proven
quality all contributed to overseas sales increases of 36% for air conditioners and 22% for
refrigerators.
These gains were achieved despite global economic uncertainty, and the challenges will
carry over through 2002. Export prices are continuing to fall, while consolidation in the
industry is becoming evident. Chinese manufacturers, in particular, are becoming stern
competitors and posing an increasing threat to further growth. Faced with such conditions
in the industry it is imperative that we maintain our renowned quality while shifting our
marketing activities into high gear. In the domestic market we must sustain our market
leadership in the high value-added sectors. Overseas, we will strengthen relationships with
OEM partners in developed markets while promoting brand recognition in emerging high-
end sectors.
Growth of over 20% in each of the past five years speaks for itself. With clear business
goals and a commitment to quality and innovation we are certain that Digital Appliance can
continue to serve as a solid earning base for LG Electronics.
Head of Digital Appliance Ssang Soo Kim
LG Electronics Inc. The
43
rd Annual Report