News Release

[Hong Kong, 16 November 2004] AS Watson, the retail division of Hutchison Whampoa Limited, today announced a new 50:50 joint venture with leading Korean retail company LG Mart Co., which signifies the expansion of its flagship Watsons health and beauty retail chain into the Korea market. The new joint venture company will be named 'GS-Watsons' and retail chain will be launched under the 'Watsons' banner. The expansion further extends the Group's global presence to 20 markets.

With the goal to establish itself as the leading health and beauty chain in the high-potential Korean market, GS-Watsons plans to open its first store in early 2005 and over 10 stores per year thereafter. The store roll-out is expected to accelerate as more stores are opened. Average store size will be 3,000 sq ft. The strength of the joint venture concept, especially the quality and depth of merchandise, is expected to take the chain to a market leader position within the next few years.

Mr Ian Wade, AS Watson Group Managing Director welcomes the new business venture with LG Mart. "The success of any joint venture depends much on the complementary strategic values each party can bring to the business. LG Mart is an established retailer in Korea with all the market know-how and network, while Watsons health and beauty chain is a proven successful concept that travels. Combining Watsons' advanced operating skills and global sourcing capabilities with LG's distribution, logistics infrastructure, information system, and site development expertise, the growth potential of Watsons chain becomes very promising in Korea."

Mr Seung-Jo Hur, President of LG Mart said, "Retail is a business that adapts to changes in the market and likewise, we aim to harness the market trends by launching the health and beauty retail business."

"Leveraging on the international experience of AS Watson as a joint venture partner, we plan to strengthen LG's position as a multi-format retailer in Korea by adding health & beauty retail business to our hypermarket, supermarket, convenience store, and department store operations," Mr Hur continues.

Commenting on the new joint venture company's strategic direction, Andrew Miles, AS Watson's Chief Executive Officer for the Watsons chain in Asia said, "Using Watsons existing operations in Taiwan and Hong Kong as a starting point, a model will be developed to meet the needs of Korean customers. The initial focus will be on key shopping locations in Seoul and its suburban areas as well as satellite cities. As we have done throughout Asia, Watsons in Korea will take a clear price position in the market, one that offers extraordinary value to the customer.

It will be a 'one-stop' shop for health and beauty customers supplying Korean, international and own label products."

The transaction is subject to approval from Federal Trade Commission in Korea.

Reference Information for Editor

About Watsons Personal Care Store (Watsons)
Watsons is the largest health and beauty retail chain in Asia, currently operating over 880 stores in eight markets: Hong Kong, Taiwan, Mainland China, Macau, Singapore, Thailand, Malaysia and the Philippines.

Building on its long-standing reputation for quality and innovation, plus a high degree of consumer confidence, Watsons caters to a variety of lifestyles with an unrivalled diversity of products. Watsons' mission is to help customers to 'Look Good, Feel Great, Have Fun'. Watsons' pledge is to offer a unique experience to customers by providing professional advice and expertise, creating interesting shopping environments and promising great values every day.

Watsons is the flagship health and beauty chain of the AS Watson Group (ASW), a wholly owned subsidiary of Hutchison Whampoa Limited. ASW has 13 retail brands in Asia and Europe with a network of over 4,600 stores, spanning from health & beauty to food, electronics, general merchandise, and airport duty free chains. Also an established player in the beverage industry, ASW provides a full range of beverages from bottled water, fruit juices, soft drinks and tea products to some of the world's finest wine labels via its international wine wholesaling and distribution network. ASW employs over 64,000 people and in 2003, its reported turnover was HKD 63 billion (approx. USD 8 billion).

About LG Mart

• GS Group and GS Holdings Corp.

  GS Group was created from the horizontal de-merger of GS Holdings from LG Corp. in July this year. GS Holdings is the holding company that holds controlling interest in GS Group's retail and energy related operating subsidiaries, such as LG Mart, LG Caltex Oil, LG Home Shopping, and GS Sports. Besides, the GS Group also has two other major affiliates outside of GS Holdings, including LG Construction and Han Moo Development (Han Moo is the owning company of two Intercontinental Hotels in Seoul).

  Total assets of GS Group amounts to more than KRW 18 trillion, which places GS as the 7th largest business group in the Korean business community (excluding public enterprises).

• LG Mart Co., Ltd.

  LG Mart Co., a subsidiary of GS Holdings, is a retail-specialised company created from the merger and consolidation of LG 25 convenience store, LG Supermarket, LG Hypermarket and LG Department Store divisions that operated within LG Group, in July of 2002.

  'LG 25' is the No.1 brand in convenience store business in Korea, operating almost 2,000 stores. 'LG Supermarket' is also a No. 1 brand in its field and currently operates 73 stores in the country. LG also has substantial operations in hypermarket and Department stores around the country.

  LG Mart's sales amounted to 2.9 trillion Won in 2003.