LG Hausys, a construction materials making arm of South Korean conglomerate LG Group, is expected to post 3 trillion won ($2.6 billion) in sales next year, mainly boosted by an increase in output at its recent addition of surface materials and artificial leather producing factories in the United States that would benefit from U.S. President-elect Donald Trump’s drive to promote America-made products.

The Korean construction materials maker earlier this year completed the construction of its second engineered stone manufacturing plant in the U.S. and started commercial production this month. Its surface materials that are engineered stone such as artificial marble and limestone slabs are the firm’s key profit generators. The company is expected to earn 300 billion won in sales from this business next year when the newly added facility aims to embark on the operation at full rate. The business generates about 250 billion won annually.

The company also completed the construction of its autoskin factory in Georgia, the U.S. in April to target the North American auto market. Autoskin factory makes automobile interior materials such as synthetic leather and fabrics for car seats, door panels and dash panels. The factory’s current operation rate hovers at around 30 percent, but the industry watchers expect it to reach 60 percent next year, thanks to new orders that the firm has won from American automakers.

Its expanded U.S. operation should help the company diversify its revenue sources, allowing it to reduce adverse impacts from frequent labor unions’ strikes in the Korean auto industry, a market analyst who asked to be unnamed said, adding that the firm would also enjoy advantages of supplying America-made products by avoiding any high import taxes that are expected to be slapped against those goods to be shipped from outside the U.S. under the new Trump administration.

The firm’s sales to be generated from its second engineered stone plant and the autoskin factory will likely reach 100 billion won in total next year, forecast Kim Ki-ryong, an analyst at LIG Investment & Securities Co.

In Korea, LG Hausys recently started to expand production capacity of a plant that churns out phenolic insulation, a plastic form used in buildings, with a target to triple output. The company aims to complete the ramp-up by February of 2018 and it is expected to benefit from the Korean government’s stricter regulations on fire safety standards that were introduced in April, requiring building constructors to use fire-resistant insulation boards in all buildings with six floors or higher.

Following a series of the latest output expansion, LG Hausys’ sales are projected to top 3 trillion won next year, up from its estimated sales of 2.85 trillion won this year, according to market analysts.

Reflecting growing expectations for an improvement in sales, LG Hausys shares have been buoyed by 13 percent after advancing for six straight sessions since December 6th. On Wednesday, its stocks ended down 1.6 percent, or 1,600 won, at 97,600, snapping its latest winning streak.

By Hong Jang-won

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]