By Kim Yoo-chul
LG Hausys, the LG Group's affiliate engaged in the industrial material manufacturing business, has agreed to launch a joint venture to manufacture energy-efficient glass with Germany’s glass processing specialist Interpane.
The move came as part of the group’s strategic efforts to develop its future revenue sources.
Under the agreement signed Monday, LG and Interpane will jointly invest 100 billion won or some $84 million by the end of 2011 in LG's domestic plant in Ulsan, South Gyeongsang Province, to produce energy-intensive glass, the company said in a press release, Monday.
LG said that it will be the majority shareholder of the joint venture with an 80 percent stake, while Interfane will own the remaining 20 percent. The joint venture will take a shape as a corporate entity in September and begin production in 2012, it added.
According to LG, the main products coming from the venture will be low-emissivity glass or Low E-glass.
Low E-glass is energy-efficient, designed to block ultraviolet and infrared rays from outside. The product controls heat transfer by about 30 to 60-percent, which LG believes will help building occupants spend less on air-conditioning.
It is 15 percent more efficient in heat transmission than non-coated glass, which is capable of transmitting 85 percent of heat.
Thanks to such technological advancements, the glass can easily be found at most window suppliers and only costs some 30 percent more than normal tempered glass, according to industry watchers.
Interpane is the Germany’s biggest glass manufacturer, which has already realized the ``vertical integration’’ from coated glasses to Low E-glasses, said a LG spokesman.
``The demand for Low E-glass will spike in Korea as the government is applying energy-intensive policies amid green initiatives. Supply will be tight within the next two years, pushing us to form a united front for the sector,’’ said the spokesman.
LG also said the creation of the joint venture will be a catalyst to effectively nurture its glass business _ one of the next earnings drivers.
LG Hausys aims to reap 150 billion won in annual revenue by 2012 only from the glass business and 280 billion won by the end of 2015, according to the release.
Last year, the group’s chemical affiliate LG Chem separated from LG Hausys.
Hausys’ main product lineups include polyvinyl chloride (PVC) windows, aluminum window frames, highly functional glass, flooring materials, wallpaper and artificial marble products.