Introduction to LG International(Revenue for 2017 in KRW trillion) Chemicals LG Household & Health Care LG Hausys 26 Chemicals, BatteriesHome Appliances 6 3 3 Communications & Services

Introduction to LG International

LG is a leading business group in Korea which was founded in 1947.

Its major affiliates are LG Electronics, LG Chemical, LG Display and

LG International.

These affiliates have global top tier competitiveness in LCD / OLED

televisions, home appliances, smart phones, rechargeable batteries

and mobile telecommunication services.

Currently, LG is fostering natural resources development and industrial infrastructure business proactively.

About LG

MARKET-LEADING LG

REVENUE NETWORKS EMPLOYEES

130 billion USD 409 operations 222,000 employed

60 countries

About LG

KEY AFFILIATES

LG CNS

(Revenue for 2017 in KRW trillion)

Chemicals

LG Household & Health Care

LG Hausys

26 Chemicals, Batteries

6 3

Communications & Services

LG U

13 Resources,

Infra & Industrial

12 3

LG Innotek

Electronics

LG Display

61 TV, Smart Phones, Home Appliances

28 8

* Since its inception in 2003 as a holding company. LG has gone on to broaden its portfolio in Electronics, Chemicals, Communications & Services while strengthening its expertise in each field and working to create customer values along the way

+

About LG Way

Vision

Code of Conduct

Management Principles

- NO.1 LG

- “Jeong-Do” Management ㆍTruthfulness ㆍJustice ㆍFair Competition Based on Capacity

- Creation Value for Customers - Reception Human Dignity

* “Jeong-Do” Management means more than ethical management. It embodies the unique LG values that emphasize constantly cultivation capabilities so that we can fairly compete and win in the market.

LG International

Since its foundation in 1953, LGI’s earnings came mainly from trading

of products and services.

In the mid 2000s, the company strategically reformed its business

models by entering into natural resources development and industrial

infrastructure business in emerging countries with growth potential.

We are securing sustainable growth by systematical linkage and

interaction among natural resource development and industrial infrastructure business.

About us

BUSINESS STRUCTURE

RESOURCES INFRA & INDUSTRIAL

Coal Oil & Gas

Food & Commodities

Coal

IT

Petrochemicals Others

TRADING

Industrial Infrastructure

Plant EPC

Metals

Automotive

RESOURCES BUSINESS

COAL

OIL & GAS

METALS

FOOD & COMMODITIES

PT.GAM Coal Mine, Indonesia PT.PAM Palm Plantation, Indonesia

GeoPark Block Fell, Chile

“TO BECOME A MAJOR COAL PRODUCER & TRADER IN ASIA BY DOWNSTREAM EXPANSION”

Based on our successful mining operations in Indonesia and China, we will expand coal mine investment while investing in the downstream such as coal power plants, coal terminal, etc.

WHAT WE DO

COAL MINES – INVEST / DEVELOP / OPERATE - Targeted regions : Indonesia, China, Australia, etc.

■

COAL TRADING - Origins : Indonesia, Australia, Russia, China, etc. - Markets : Korea, China, Japan, India, Southeast Asia

■

COAL OIL & GAS METALS FOOD & COMMODITIES

RESOURCES BUSINESS

PT.MPP Coal Mine, Indonesia

TRADING VOLUME (2016~2020)

(Unit: million tons)

(Unit: million tons)

COUNTRY ANNUAL

PRODUCTION MINABLE RESERVES

SHARE RATIO PHASE COMMENCEMENT

Wantugou

PT.GAM

Total

Australia

Indonesia

China

Indonesia

PT.MPP

Ensham

-

5

2

4

6

17

150

9

131

210

500

15%

75%

30%

60%

-

Production

Production

Production

-

1983

2007

2008

2012

-

2016 2017

2018 (E)

2019 (E)

2020 (E)

9 11

14 16

18

Production

PT.GAM Coal Mine, Indonesia

RESOURCES BUSINESS

ASSET

KEY ASSETS


“SEEKING FOR INVESTMENT OPPORTUNITIES IN TARGETED REGIONS BASED ON TECHNICAL CAPABILITIES”

Stretching further into targeted regions through strategic partnership with companies having regional expertise

OIL & GAS FIELDS – INVEST / DEVELOP - Targeted regions : The Americas, Middle East, Southeast Asia

■

BUILD UP OPERATIONAL CAPABILITY ■

- Focused on oil & gas field in development / production stage

GeoPark Block Llanos 34, Colombia

RESOURCES BUSINESS


WHAT WE DO


COUNTRY STATUS

Oman

Vietnam

Chile

Colombia

Kazakhstan

Qatar

P

P

P/E (6 Blocks)

P (5 Blocks)

P

P

KEY ASSETS

P : Production

E : Exploration

Block 11-2 Gas Field, Vietnam

Block 8

Block 11-2

GeoPark Colombia

ADA

LNG Project

GeoPark Chile

RESOURCES BUSINESS

ASSET

ADA

Block 8 LNG Project

Block 11-2

GeoPark Colombia (5 Blocks)

GeoPark Chile (6 Blocks)

“PROVIDING CUSTOMIZED SERVICE BY INVESTING IN STEEL PROCESSING CENTERS AND NON-FERROUS METAL MINES”

Concentrating on marketing activity to end users with high value-added products. At the same time, we are operating steel processing centers to provide better service for customers

STEEL PROCESSING CENTER OPERATION ■

- Location : China (Tianjin, Guangzhou), Vietnam, India, Poland and Thailand

Tianjin Steel Processing Center, China

NON-FERROUS METAL INVESTMENT ■

RESOURCES BUSINESS


WHAT WE DO

Tianjin Steel Flower

Guangzhou Steel Flower

Haiphong Steel Flower

POSCO-PWPC

POSCO-IPPC Thai Dongbu Steel

Steel Processing Center

Guangzhou Steel Processing Center, China

COUNTRY PRODUCTION CAPA

China

China

Vietnam

India

Poland

Thailand

120 KMT

60 KMT

60 KMT

450 KMT

100 KMT

60 KMT

KEY ASSETS

Tianjin Steel Flower

Guangzhou Steel Flower

POSCO-IPPC

POSCO-PWPC

Thai Dongbu Steel

Haiphong Steel Flower

Rosemont

U.S.A Development Rosemont Non-Ferrous Metal Mine

RESOURCES BUSINESS

ASSET


“AIM TO BE A MAJOR PLAYER IN PALM OIL INDUSTRY”

Based on our operating experience in palm plantation and CPO(Crude Palm Oil) Mill in Indonesia, we plan to acquire 150,000 ha of plantation area and

produce 360,000 tons of CPO by 2025

PALM PLANTATION – INVEST / DEVELOP / OPERATE - Expand production volume by enhancement in productivity and investment in new plantation

■

OPERATE CPO (Crude Palm Oil) MILL ■

- Plan to build additional CPO mill

RESOURCES BUSINESS

PT.PAM CPO Mill, Indonesia


WHAT WE DO

CONCESSION AREA (2016~2025)

KEY ASSETS

(Unit: thousand tons)

PT. PAM

PT. GUM

PT. TBSM

LOCATION PHASE SHARE RATIO COMMENCEMENT

Indonesia

Indonesia

Indonesia

20,000ha

17,000ha

8,000ha

2009

2018

2018

In consideration of acquiring new assets (development / production stage) in Kalimantan, etc. ■

COUNTRY CONCESSION AREA

West Kalimantan

West Kalimantan

West Kalimantan

95%

95%

95%

(Unit: thousand ha)

Production

CPO PRODUCTION (2016~2025)

2016 2017

2018 (E)

2020 (E)

2025 (E)

68 86

130

280

360

20

100

45

RESOURCES BUSINESS

20

PT.PAM Palm Plantation, Indonesia

2016 2017

2018 (E)

2020 (E)

2025 (E)

150


Production / Development

Production

INFRA & INDUSTRIAL BUSINESS

CHEMICALS & PROJECT

POWER & INFRA PROJECT

AUTOMOTIVE

IT

Bodashidi Coal-to-Chemical Plant, China Wuwei Thermal Power Plant in Gansu, China

Ethane Cracker & PE/PP Plant in Kiyanly, Turkmenistan

“REINFORCING BUSINESS STABILITY BY FOCUSING ON KEY ITEMS, WHILE LOOKING FOR INVESTMENT OPPORTUNITIES IN CHEMICAL PLANT AND OFF-TAKE RIGHTS” Based on our expertise in trading, we have secured off-take rights by acquiring

stake in coal-to-chemical plant in Inner Mongolia and winning orders for gas treatment, ethane cracker and PE/PP plants in Turkmenistan

SECURE PRODUCT SALES RIGHT THROUGH DEVELOPMENT AND INVESTMENT IN CHEMICAL PLANTS

■

CHEMICALS & PETROCHEMICALS TRADING ■

- Methanol, MTBE, Refrigerant, Organic / Inorganic chemicals

- Fertilizers (Urea, Sulfur, etc.) PE, PP, PTA, etc.

CHEMICALS POWER & IT AUTOMOTIVE & PROJECT INFRA PROJECT


Bodashidi Coal-to-Chemical Plant in Inner-Mongolia, China

WHAT WE DO

KEY ASSETS

BODASHIDI (BDSD)

PRODUCTS CAPA (MT/YEAR)

OWNERSHIP PHASE

Inner Mongolia Urea 940K 29% Production

COUNTRY

Oman PTA Oman PTA 1,100K 30% Development

Additionally, minority stakes(10%) in LG Bohai(China, VCM / PVC), LG Vina(Vietnam, Plasticizer) ■

OFF-TAKE STATUS

Oman PP

PRODUCTS CAPA (MT/YEAR)

OFF-TAKE (MT/YEAR)

PHASE COUNTRY

Turkmenistan PE

Turkmenistan PP

Oman PP 340K 100~110K Production

Development

Development

Turkmenistan

Turkmenistan PP

390K

80K

PE 390K

80K


ASSET

ASSET

**

**

***

* ** Polypropylene

Polyethylene ***

Purified Terephthalic Acid

*


Gas Treatment Plant in Galkynysh, Turkmenistan

“PROJECT DEVELOPER IN THE FIELD OF POWER PLANT AND INFRASTRUCTURE PROJECT”

The company takes significant role in developing industrial infrastructures to accelerate industrialization in each emerging market

PROJECT DEVELOPMENT ■

EQUITY INVESTMENT ■

FEEDSTOCK SOURCING

■

PROJECT FINANCING ■

EPC, O&M ORGANIZING ■



Hasang Hydro-electric Power Plant, Indonesia

WHAT WE DO

KEY ASSETS

Musandam Power Plant

CAPA OWNERSHIP PHASE

Oman 120 MW 30% Production

COUNTRY

China 700 MW 30% Production


ASSET

Indonesia 41 MW 95% Construction

Wuwei Thermal Power Plant

Hasang Hydro Power Plant

GAS, DIESEL

FUEL

COAL

WATER

PRODUCTS

Power

Power, Heat

Power

Cement Plant, Myanmar

KEY BUSINESS IPP PROJECT INDUSTRIAL INFRASTRUCTURE

BUSINESS TYPE

STRATEGIC REGION

EXAMPLES

▪ Development of IPP Projects through investment and EPC participation

▪ Infrastructural development in strategic region

▪ Asia ▪ Middle East etc.

▪ Thermal Power Project ▪ Gas-Diesel Power Project ▪ Hydro-electric Power Project

▪ Cement Plant ▪ Water / Wastewater Treatment Plant ▪ Natural resources related Infrastructure

Classification


Cement Plant Myanmar 450,000 TON COAL Cement 51% Production

▪ Asia ▪ Middle East etc.

“WE ARE SOURCING MAIN COMPONENTS FOR TV, MOBILEPHONE, PC AT COMPETITIVE CONDITIONS WHILE SUPPLYING TO OUR CUSTOMERS IN A TIMELY MANNER.”

In addition, we are creating values to our vendors and customers by optimizing cost structure through our Vendor Management Inventory(VMI) service

ITEMS : LCD PANEL, ELECTRONIC EQUIPMENTS AND COMPONENTS ■

(Purchase, Procurement, Stock, Supply Management) LOGISTICS AND WAREHOUSE CONTROL

FINANCING AND RISK MANAGEMENT

■

■



WHAT WE DO

VMI APPLICATION SCOPE

MAJOR CLIENTS

LG Electronics, LG Display, BOE, AUO, Innolux, CSOT, Sharp, Canon, Qualcomm, Nichia, CDOT, Sunny Oppotech, HLDS, HP, Lenovo, DELL, Apple, Acer etc.

JIT* SCOPE

PRODUCTION / RELEASE

SHIPPING TRANSIT CARRY -IN

STORAGE LINE WAREHOUSE

CARRY -OUT

*JUST IN TIME

Nanjing HUB Warehouse, China

HUB


CUSTOMS CLEARANCE


“INTEGRATED SOLUTION PROVIDER TO AUTOMAKER”

In cooperation with LG automotive affiliates and leading tier1 partners, we provide integrated solutions from vehicle engineering, EV powertrain and parts supply

ENGINEERING - Vehicle

■

- Powertrain - Manufacturing

AUTOMOTIVE PARTS - EV components

■

- Motor & Sensor - Drivetrain (4WD)

- Engine components


- LED Lighting


WHAT WE DO

MATERIAL SUPPLY

VEHICLE ENGINEERING

MANUFACTURING ENGINEERING

EV POWERTRAIN POWERTRAIN

ENGINEERING

PARTS DEVELOPMENT & SUPPLY

AFFILIATES WORK SCOPE

LG Electronics

LG Innotek

LG Chem

LG Hausys

Vehicle Engineering ■

EV Powertrain / Infotainment ■

Motor & Sensor / LED Lighting ■

Automotive Battery ■

Plastic engine parts / Automotive skin ■

LG Display In-Vehicle Display ■



APPENDIX

SOCIAL CONTRIBUTION

GLOBAL NETWORKS

FINANCIAL HIGHLIGHTS

‘Bridge of Love’ in Sekadau near the Palm Plantation, Indonesia

INVESTMENT ASSETS

SOCIAL CONTRIBUTION

Our social contribution focuses on helping the self-reliance of vulnerable social groups by the voluntary participation of employees, which pursues improving the quality of life of local people and developing local communities around our worksites. Particularly, in Korea, we are collaborating with the 「Seobu Welfare Center for Persons with Disabilities」 to join culture events for the disabled aimed at supporting their adaptation to the society. We have also built solid trust with local communities where our overseas projects are conducted through social contribution activities.

LGI(HQ) employees, conduct volunteer work for the disabled and the disadvantaged

LGI(HQ) employees, conduct voluntary service for disabled person’s work adjustment training

Indonesia PT. PAM (Palm Plantation and CPO Mill)

Supports for revamping a wooden bridge

Medical volunteering services

Scholarships to high school students

Repair of local roads

Cement Plant in Myanmar

Support for teachers’ salary

Indonesia PT. MPP (Bituminous coal mine)

Construction of an Islam temple in Zmbayam Dalam Village

Medical supports for local people

Delivery of school supplies to Elementary school students in Smbba Yangwoo Village

Repair of a wooden bridge in Bumi Etam Village

Support for medical facilities for low-income patients

Donation of daily necessities to Karangan flood victims

Indonesia PT. GAM (Bituminous coal mine)

BALANCE SHEET (CONSOLIDATED)

INCOME STATEMENT (CONSOLIDATED)

(Unit: KRW billion)

ITEMS 2015 2016 2017

ASSETS 5,383.5 5,177.3 4,967.6

CURRENT ASSETS 3,074.2 2,672.0 2,554.2

NON-CURRENT ASSETS 2,309.3 2,505.3 2,413.4

LIABILITIES 3,840.2 3,531.9 3.382.1

CURRENT LIABILITIES 2,589.1 2,098.3 2,130.3

NON-CURRENT LIABILITIES 1,251.1 1,433.6 1,251.8

EQUITY 1,543.3 1,645.4 1,585.5

ITEMS 2015 2016 2017

SALES 13,224.5 11,966.7 12,827.2

GROSS PROFIT 513.7 745.9 750.6

OPERATING PROFIT 81.7 174.1 212.3

NON-OPERATING PROFIT (296.9) (40.9) (34.4)

PROFIT BERFORE TAX (215.2) 133.2 177.9

NET INCOME (217.1)* 84.8 88.2

* Including impairment loss in oil asset

FINANCIAL HIGHLIGHTS

(Unit: KRW billion)

Singapore

Japan

Europe

GLOBAL NETWORKS

Seoul (HQ)

Hong Kong

Shanghai U.S.A.

Head Office

Branch Office

Liaison Office

Head Office and Subsidiaries

Branch Offices Liaison Offices

7

20

8 (As of April 2018)

Moscow

Istanbul Ashgabat

Tehran

Dubai

Muscat

Mumbai

Almaty

Erdos Beijing

Lanzhou

Chongqing

Guangzhou Taipei Shenzhen

Sao Paulo

Jakarta

Yangon Bangkok

Ho Chi Minh

INVESTMENT ASSETS

1

5

6 1

2

4

3

2

1

2

4

3

3

2

4

Coal

PT. MPP in Indonesia

PT. GAM in Indonesia

Wantugou in China

Ensham in Australia

1

2

3

4

Palm

PT. PAM in Indonesia

4

3

2

1

Power & Infra Project

Musandam IPP in Oman

Wuwei IPP in China

Cement Plant in Myanmar

Hasang Hydroelectric Power Plant in Indonesia

2

1

Chemicals & Project

PTA Plant in Oman

Inner Mongolia Coal-to- Chemical Plant in China

Metals

Tianjin Steel Flower in China

Guangzhou Steel Flower in China

Haiphong Steel Flower in Vietnam

POSCO-PWPC in Poland

POSCO-IPPC in India

Thai Dongbu Steel in Thailand

3

4

5

6

6

5

4

3

2

1 Block 8 in Oman

Block 11-2 in Vietnam

GeoPark in Chile

GeoPark in Colombia

ADA in Kazakhstan

LNG Project in Qatar

Oil / Gas

Investment Assets

(As of April 2018)

26

PT. GUM in Indonesia

PT. TBSM in Indonesia

1

2

1

2

3

4

5 6

1

2

3

1

Rosemont Mine in U.S.A 7

7

2 1 3

Documents

Introduction to LG International(Revenue for 2017 in KRW trillion) Chemicals LG Household & Health Care LG Hausys 26 Chemicals, BatteriesHome Appliances 6 3 3 Communications & Services