|Subject||New Year's greetings|
I wish the health and family happiness of LCC employees for the New Year's morning in 2023. I would like to congratulate all together as we can get out of the long 'Covid-19 Tunnel' for three years and return to our bright and lively daily lives.
In addition, our clients, partners, and overseas buyers and Pieras who help and support us to fulfill our dreams and vision of 'Be an one hundred years company through export' I wish you good health, happiness, and good luck in business prosperity in the new year.
In 2023, we will make all-out efforts to develop the US market for Dispenser Mouthwash to achieve $30 million in exports. We developed an Auto Dispenser(paper cup built-in device) for convenience by investing more than 1million dollars and combining new ideas, but after finding some defects, we improved a perfect dispenser by replacing pump and solenoid valves, modifying PCBs, and repairing case molds.
We will first install our Auto Dispenser in 'Chick-Fil-A' which has 3,000 stores, to expand the product's promotional effect, and add two to three franchises within the year to spread throughout the United States. Dispenser mouthwash is a New Idea product that is 'sanitary and convenient to use in public places' and has the great advantage of having no competitors, but it also has the disadvantage of consumer promotion and lack of awareness. Therefore, we need to spend a lot of marketing money on the rough journey of exploring new markets and developing mouthwash products suitable for the U.S. market and consumers.
More than 20 years ago, LCC developed the world's first mouthwash dispenser to provide paper cups, accounting for more than 90% of the market share in Korea, and has continued to export to Europe, Japan, the Middle East, and China. But we can't expect business success without targeting the United States, which is a huge market for mouthwash, with the characteristic of the niche market. This led to the development of Auto Dispenser, which designed the Slim (thickness of less than 4 inches) type in accordance with the Disability Act in the United States, and automatically added convenience for cup and mouthwash withdrawals.
We made Promotion videos and catalogs of products and company which are necessary for pioneering agents whom play a major role in product sales. we are also making great efforts to expand products through KOTRA's LA and New York branch offices. Across the Pacific Ocean, we will explore the U.S. market, the largest consumer of mouthwash, to launch a new challenge aimed at $30 million in exports.
The year 2022 of Propolinse Mouthwash, which is becoming a luxury item in the Japanese market, has been a groundbreaking and meaningful year. Mr Hina, the CEO of Pieras, invested million of dollars in advertising and conducted TV advertisements through terrestrial TV and BS satellite channels nationwide such as Asahi, Yomiuri, and Fuji, challenging products of large Japanese companies. With Mr. Hina resolution, the Pieras collaborated and produced 'Hello Kitty Character' with 'Sanrio Japan' and proceeded animation advertisements nationwide and proudly topped the mouthwash search rankings in Japan in May and September, and Market Share also soared to 8%, increasing sales by 40%. A large-scale dedicated stand was installed in the large stores of Tokyo and Osaka. Entered in the additional 2,000 new Drug-Store stores. At the 600 stores of "Don Quixote" showed breakthrough sales of 45% of gargle sales. In addition to TV advertisements, the famous 'Egashira' YouTube advertisement and 'Kake Hina' TikTok advertisement with 11 million followers were carried out, and promotional activities were carried out to distribute 3 million 'Sanrio character' sachet products for free.
Along with 'Itoen' and other Japanese conglomerates, the Smo Association's Main Sponsor promotes Propolis Gargle every sumo match, and in October, it also promotes in sports games by throwing the first pitch at Chiba Lotte Marines Baseball Stadium.
Propolinse mouthwash is being broadcasted through 'Special Today' of QVC Home Shopping in Japan, and free trial with Dispenser-Mouthwash is being conducted at the sports center, and it is also participating in large exhibitions in Japan to create a craze for Propolinse Mouthwash. In the new year, Chinese TV advertisements are planned to be released due to the Zero Covid-19 policy, and sales routes to India Amazon are expected to be expanded due to strong sales of Indian home shopping, and exports to Australia, the Middle East, and Mongolia are expected to increase significantly.
With the diversification of the package of Lip Care, we will expand our export volume to the global markets of the United States, Europe, the Middle East, and Southeast Asia. Last year, it exported a total of 25 million units, especially in major retailers such as Walmart, Amazon, and Dollar Tree in the U.S., causing a sensation in the U.S. market.
The scale of the U.S. market (as of 2020) is 200 million units 650 million USD, with famous brands such as Chapstick, Burt's Bees, Carmex, and Blistex dominating the market, but our Vaseline, a latecomer, also ranks fifth in the Market Share. In particular, 9 million 'Labeling Lip Care' were exported last year, and the export volume was successfully expanded through packaging diversification along with 2 to 3 packs and RRP packaging.
LCC, which has a large capacity of 80 million units (8 hours/based on 1 working day) per year due to the expansion of the factory and has 'global price competitiveness' through automation of mix, charging, and packaging and excellent logistics flow, will be able to win the global market with natural prescription development and transparent and translucent cap design.
We will expand sales of 'ORIOX' in the Daiso, No Brand Shop, and Korean-SPA markets. More than 20 years ago, We launched our own brand 'ORIOX' at the Korean-SPA and Dispenser mouthwash industry. It was also 'quality and price competitiveness' that allowed our brand to enter Daiso stores in 2008 and No Brand in 2019. Now, the large companies AP Group and LG group withdraw their product from Korean-SPA market, so that we need to focus on exploring new markets, and we will expand 'ORIOX' to launch various new products at Daiso and NB shops and to Package Renewal.
Pieras and LCC are mutually WIN-WIN, forming a strong partnership through the division of sales-production roles. In line with Japan's terrestrial TV advertisements, various marketing activities, and increased sales due to global marketing in China, Australia, and India, we have completed a new factory with the latest facilities to provide mass and timely supply. The 600ml¡¤150ml Automatic¡¤Continuous, Charging and Packaging Line has production facilities that are not inferior to those of any other large company in the world, such as automatic supply of bottle and cap, introduced high-speed and continuous process, automation of cap sealing¡¤labeling¡¤POP process as well. The Vision inspector can now be installed to produce and supply 'Zero Defect products' that do not create a single defect. In addition, we will focus more on the quality upgrade of Propolinse mouthwash, which has excellent gum disease treatment and odor removal effects, and has a visual effect of washing away even debris from the mouth.
As Propolinse mouthwash is reborn as a masterpiece in the Japan market, exports to China and India, Lip Care also needs to increase Market Share in the U.S. to Europe and Asia, and Dispenser mouthwash's successfully to distribute in U.S. market through Franchises need to strengthen the quality competitiveness of flawless products and secure prices with advanced countries.
In order to achieve quality competitiveness, we need to supplement and establish the 'LCC Quality Management System' centered on the QA team, improve the quality of subsidiary materials of the purchase team, and production team have to induce the participation of field worker's various ideas to produce Zero-Defect products.
Increasing price competitiveness requires the production team's productivity improvement, automation and performance efforts, and the cost reduction of raw material purchases by the purchase team must be made. In addition, in order to continue to lower general management costs, 'settle system management through ERP improvement and Standard revision' in Article 7 of the company statement must be rooted.
In particular, we will classify and disclose each department's standards through electronic bulletin boards, clarify the division of work between departments, and create Synergy by cooperating with each other. I hope this year marks the 25th anniversary of LCC establishment and will be a year of new challenges.
CEO BAIK, SUNGCHUN