Dubai, UAE, April 12, 2006: LG Electronics announced that it signed a contract today with H.G. Ibrahim Shaker, the company's Saudi Arabian partner, to establish the LG-Shaker Air Conditioning Company. The signing ceremony was held at the Marriott Hotel in Riyadh.

H.G. Ibrahim Shaker is LG's biggest partner in its air conditioner business in Saudi Arabia. The initial investment volume for the joint venture is US$5.5 million. The joint venture will invest US$30 million by 2010 in plant construction.

The new air conditioner production facility is being built in Riyadh's 2nd Industrial City. It is set to open in the first half of 2007. The plant is expected to have an annual production capacity of 250,000 units by 2008.

Mr. H.Y. Nho, Executive Vice President of LG Electronics Digital Appliance Company, who is in charge of the company's Air-Conditioning Division, said: "Saudi Arabia is the biggest market in the Middle East. LG will build the complete local business system from the product development stage to sales. We plan to further strengthen our global network of air conditioning business by utilising all regional production facilities, including the plant we will build in the country. After the completion of this new air conditioner production facility in Saudi Arabia, LG will have nine air conditioner production facilities located in all major home appliance markets around the world."

LG Electronics plans to use the new facility to continue its expansion in the GCC by developing and producing localised products at competitive price while saving on expenses such as distribution costs and customs duties.

The Saudi Arabian air conditioner market is growing at an average rate of seven per cent annually. The market size was US$400 million last year, and is expected to grow to US$450 million this year and to approximately US$700 million by 2011. Last year LG's market share in the country was 19 per cent. The company aims to hold 22 per cent of the market in 2006 and 30 per cent in 2011, solidifying its number one position.

LG currently operates air conditioner plants in Turkey, India, Thailand, Brazil, China, Vietnam, and Korea. It signed a contract to enter into a technical alliance with its Iranian partner 'Gold Iran' in February to build a plant in Iran. Production sites in Turkey and India supply the European and African markets, the plant in Brazil provides for the North and South American region, and the plant in Thailand serves the ASEAN Free Trade Area (AFTA). Additionally, the Korean plant functions as LG's air conditioning technology global R&D center, while the plant in China focuses on the domestic market.

When its ninth plant in Saudi Arabia begins operations, LG will have the strongest global air conditioner production network in the world. Local plants in Saudi Arabia and Iran, the region's two biggest home appliance markets, will allow LG to secure market leadership in the Middle East.

-Ends- 

About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 06657.KS) is the world's major forces and a technology innovator in electronics, information and communications products. The company has more than 70,000 employees working in 77 subsidiaries and marketing units in 39 countries around the world. LG Electronics is the world's largest producer of CDMA handsets, DVD players, optical storage devices, air conditioners, canister vacuum cleaners and micro ovens. With total revenue of more than USD 35 billion (non-consolidated), LG Electronics is comprised of four business units: Mobile Communications, Digital Appliance, Digital Display and Digital Media. For more information please visit www.lge.com.

LG Electronics Digital Appliance Company (DAC) is a technological leader and a pioneer in home appliance convergence. LG DAC provides a total package of digital products for homes, which includes air conditioners, refrigerators, washing machines, cooking appliances, and vacuum cleaners. LG has also made entry in the built-in appliance market. LG's innovative combination products and home network features have garnered international acclaim.

LG Electronics' goal is to enable the intelligent networking of digital products that will make consumers' lives better than ever. For more information, please visit www.lge.com

© Press Release 2006