Luxottica Group, S.p.A. (LUX)

MANUFACTURING PLANTS AND PRODUCTION

Production is concentrated mainly in six plants in Italy, mostly in the northeast. Of these, the Sedico plant, near Belluno, was expanded in 2006 and now covers approximately 30,000 square meters. Given the growth in the business, the Group also decided to expand the Lauriano plant, which specializes in glass and plastic sun lenses, by 11,000 square meters. The Group also has two wholly-owned plants in China. One plant with 26,000 square meters started operations in 2006. The Chinese plants handle the more labor-intensive lines of production, while the Italian facilities concentrate on «Made in Italy» production, which has very high value-added qualities. Consumer demand for such products is strong, driving the Group’s development of premium and luxury products, both directly through its stores and indirectly through its wholesale customers. In 2006, with this increased level of market demand, the Italian plants stepped up the production of luxury brands and premium products in general.

On the materials front, 2006 saw an increase in the production of metal parts to meet demand for metal detailing, even in plastic frames, while production with other materials, including injected plastic and acetate, remained stable.