LG Household and Health Care’s (H&H) cosmetics facility is driving forward with development in Cheonan, South Chungcheong Province, South Korea.
The first-of-its-kind complex in the country will be located on a 390,000 square metre site, and will include manufacturing facilities, a smart factory containing Internet of Things (IoT) technologies, raw materials cultivation facilities, as well as shopping services and tourism facilities.
On July 7, government ministries announced that relevant departments would build a new access road and establish water treatment facilities specifically for the complex.
LG H&H success
Advocates of product development research, skin research, materials research and supported research, LG H&H has honed its growth trajectories and hit stock market success; helping it to become of South Korea’s leading cosmetic companies.
As of May 2016, Forbes announced LG H&H’s market capital valued at $13.7bn with sales of $4.71 bn.
Through major M&As, which include Coca-Cola and The Face Shop, LG H&H has developed into one of the top 10 companies by total market value.
Sales results
Overall, LG H&H’s operating profit has jumped 34.1% to 225.4 bn won (US$220 mn) and is South Korea’s second-largest cosmetics company after AmorePacific Group.
High growth in luxury cosmetics has led to LG H&H’s operating profit margin improving to 18.6% from the previous year.
Sales in LG H&H’s luxury cosmetics grew by 56% and have created sales contributions within the cosmetic sector of 70%.
The growth of cosmetic brands throughout Korea, China, Japan, Taiwan, Hong Kong and the US include global leader The History of Whoo and Sum 37º, which promotes high-functioning cosmetics that prioritise aesthetics and vitality in its product range.
Other popular LG cosmetic brands include 'LacVert,' 'ISA KNOX,' 'OHUI, Hercyna,' 'Fabianne,' and Wrinkle Decline.
The half-year results in 2016 reflect the total company’s highest results of all time, with sales increasing 17.6% to 3.1tr won and operating profit rising 32.4% year-on-year to 459 bn received.
This reflects 11 years of continuous growth in both sales and operating profit.
South Korean Development
The OECD has reported that in 2014 Korea spent $72.83 bn on R&D and remains the fifth largest global R&D investor after the US, China, Japan and Germany.
In 2016, the total government R&D budget is KRW 18.9 trillion ($14.4 bn).
LG contributes to Korean R&D, along with other international companies including Samsung and Hyundai/Kia Motors.
Almost three-quarters (73.7%) of Korean R&D investment is supported by the industrial sector. The remainder of the funding is provided by the government, with research conducted by South Korean universities and national research institutes.