REFILE-LG Elec says sees tougher H2 for home appliances

* Sees tougher H2 on rising costs, weak demand

* Open to healthcare M&As, to double 2011 sales to $118 mln

* Targets 11-12 pct home appliance market share in 2010

(Refiles to fix typo in 10th paragraph)

SEOUL, Sept 1 (Reuters) - LG Electronics Inc (066570.KS) expects tougher conditions for its home appliance division in the second half due to weak demand from Europe and rising cost pressures, a top executive said on Wednesday.

The world's third-largest home appliances firm after U.S.-based Whirlpool Corp (WHR.N) and Electrolux of Sweden also announced plans to invest $70 million by 2015 to boost production in Poland.

"H2 will be slightly tougher than H1 because raw material costs continue to rise and overall demand has weakened following European debt problems," said Lee Young-ha, chief executive of LG's appliance unit, the group's major cash cow.

"Going forward we aim to lift margins to around 10 percent and boost our global market share by some 2 percentage points next year from the 11-12 percent estimated this year by building on our brand and raising product reliabilty," Lee said.

Lee's comments, made at a news conference with foreign media in Seoul, were embargoed until Wednesday for the IFA consu mer electronics trade show in Berlin.

The division, the most profitable among LG's five units, posted a 6.8 percent operating margin in the second quarter.

By contrast the TV division of the world's No.2 TV maker posted razor-thin 0.5 percent margins last quarter due to a weak euro and delays in product launches, while its handset unit, ranked the world's No.3, reported a record loss hit by its lack of a strong smartphone lineup.

The home appliance division is expanding into the healthcare sector and aims to double sales from the new business to 140 billion won ($117.5 million) next year, focusing initially on products like air cleaners and water purifiers as it seeks to take on bigger rivals such as Philips (PHG.AS).

"The business has a strong growth potential as demand grows along with an aging population and improving living standards...We are open to M&A in this area to grow the business but have no immediate targets for now," Lee said.

LG is not considering M&As in other appliance areas and instead plans to localise production in core markets to lower costs and secure alliances with local partners, Lee said.

LG said on Tuesday it would expand its Wroclaw plant in Poland, its key production hub in Europe, to start producing washing machines with annual capacity of 700,000 units and boost fridge output capacity to 1.4 million units from the current 300,000.

Shares in LG fell 0.7 percent as of 0250 GMT versus a 1.3 percent rise in the broader market .KS11.

(Reporting by Miyoung Kim; Editing by Jonathan Hopfner)