LG Electronics announces price hike

New Delhi

June 3, 2008

LG Electronics India Pvt Ltd (LGEIL) announced a price hike owing to the
constant escalation of input costs. The price hike will span across categories
like monitors and optical storage devices and the targeted price increase is
around seven to 10 percent. However, with a view to soft pedal these sudden
impacts LG will be increasing the prices in a phased manner, starting with three
percent with immediate effect.

The LCD monitors will have two additional impacts in market prices. As the
customs duty is based on MRP, this dollar appreciation is further compounded by
proportionate increase in duty owing to increased MRP. Additionally, there is an
increasing trend of LCD panel prices. Thus, in LCD monitors the impact will be a
combined effect of dollar appreciation, proportionate duty increase and the
panel price increase.

Commenting on the price hike, R Manikandan, Business Group Head-Monitors
and OSD, said, “It has become imperative for us to consider price hike due to
rise in exchange rate, which has gone up significantly in the last one month.
From sub-40 range in the last week of April, the exchange rate has gone up to
42.5 as on May 29. This is approx seven percent rise in exchange rate over last
one month period, resulting in increased costing, calling for increase in market
prices.”

Talking to the channel partners on the price hike, he further said, “Our
partners have always been very supportive in the past and we would appreciate
their support in this complex situation as well. I take this opportunity to
request them to take due care while quoting forward prices as the price increase
will be felt steadily on all products and brands, of course with varied
intensity levels. It can be a good idea to stock up the LCD monitors as much as
they can manage in the short run.”

As the dollar projections are looking stronger in the short run, the overall
prices will have to go upwards steadily, the most vulnerable being the LCD owing
to compounded effect.