LX Hausys Operating Profit Doubles
Declining PVC Prices for Window Raw Materials
Top Model Marketing Strengthened to Target B2C Market
Despite the real estate market downturn, the window and door industry maintained solid performance. This was due to the decline in the price of polyvinyl chloride (PVC), one of the key raw materials for windows and doors.
According to the industry on the 28th, LX Hausys recorded sales of 849.5 billion KRW and an operating profit of 32.4 billion KRW in the first quarter of this year. Sales slightly increased by 1.1% compared to the same period last year, while operating profit surged by 101.1%.
LX Hausys explained that despite the downturn in the upstream markets such as construction and real estate, sales slightly rose year-on-year due to increased sales of key products including windows and doors, insulation materials, and industrial films. Operating profit improved thanks to the decline in raw material costs such as PVC and cost improvement activities.
According to LX Hausys’ 2023 business report, the price of PVC per kilogram decreased from 1,858 KRW in 2021 to 1,627 KRW in 2022, and further dropped to 1,212 KRW in 2023. This year, PVC prices have slightly declined compared to 2023 as well.
With raw material prices falling, the first quarter performance of KCC, a major player in the window and door market, is also expected to improve compared to last year. Financial information provider FnGuide forecasted that KCC will record sales of 1.58 trillion KRW and an operating profit of 81.5 billion KRW in the first quarter. These figures represent increases of 1% and 7%, respectively, compared to the same period last year. Although the first quarter is typically an off-season, the continued weakness in PVC prices is expected to sustain solid profitability.
LX Hausys and KCC anticipate that the window and door market will remain sluggish this year due to the real estate market downturn. However, with the margin rate increasing due to the decline in raw material prices, their strategy is to actively promote premium window and door brands to drive profitability.
Recently, LX Hausys selected actress Jeon Ji-hyun as a new model and launched a new advertisement introducing the window product ‘LX Z:IN Window View Frame.’ LX Hausys previously featured actress Jeon Yeo-bin in advertisements in 2021 but had not used an actress in recent ads. The new advertising campaign will be actively exposed across various online and offline channels including TV commercials, print media, outdoor ads, YouTube, and social media, aiming to continuously expand customer touchpoints for the ‘View Frame’ product.
Earlier, KCC has been running advertising marketing for three years with actress Kim Hee-sun as the model for its premium window brand ‘Clence.’ Kumho Petrochemical has been featuring actress Shin Min-a as the model for its ‘Hugreen’ windows.
An industry insider said, "The B2B (business-to-business) market is sluggish due to the domestic construction market downturn, so companies are actively targeting the B2C (business-to-consumer) market by using widely recognized big-name models," adding, "Competition among premium window and door brands will be fiercer this year."
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