LG Chem Ltd is to spend 10 trillion won (US$8.7 billion) through 2025 to accelerate a “sustainable growth” in its battery materials operations and other business lines, joining other South Korean industrial giants in a shift toward greener practices.
The petrochemical producer is to spend 6 trillion won expanding production lines of its battery materials, including cathode and separators, while 3 trillion won is to go into producing more environmentally friendly petrochemical products, according to a statement yesterday.
The rest of the investment is to be used in LG Chem’s life science operations.
“This is by far the most innovative change the company is making since its establishment, which will further lift value and sustainability,” LG Chem chief executive Shin Hak-cheol said in a statement before a media briefing in Seoul. “We’ll be able to see tangible results from the second half of this year.”
The private sector in South Korea has been rushing to announce massive investment plans to reduce its carbon footprint and foster sustainable growth.
SK Innovation Co earlier this month said it is to invest 30 trillion won through 2025 to strengthen its green business portfolio, mainly in batteries and recycling plastic waste, while Lotte Chemical Corp on Tuesday said it is to spend 4.4 trillion won through 2030 to increase hydrogen output.
“We will transform our business portfolio based on ESG [environmental, social and governance]-related operations and we will prove that we can make a sustainable growth,” Shin said in his briefing. “It’s the time for a major overhaul.”
LG Chem’s massive investment in its battery materials operations comes amid surging demand for electric vehicles. The company expects the materials market to grow to about 100 trillion won in 2026, from 39 trillion won this year.
To benefit from increased demand, LG Chem is to start building a cathode materials production facility in Gumi, South Korea, from December with an annual capacity of 60,000 tonnes, it said.
LG Chem expects its cathode output capacity to rise to 260,000 tonnes in 2026, from 40,000 tonnes last year.
The company is also seeking mergers and acquisitions or joint ventures on separators, with a plan to set up an overseas manufacturing plant, while further expanding carbon nanotube production.
For the stable supply of metals used in cathode output, LG Chem is working on forming a joint venture with a mining company to improve its competitiveness in sourcing, Shin said.
By broadening the lineup of products for battery materials, LG Chem hopes to maximize its partnership with battery unit LG Energy Solution, which has applied to the Korea Exchange for a preliminary review for an initial public offering.
The listing is possible this year, Shin said, adding that LG Chem would retain a 70 to 80 percent stake in the unit.
For LG Chem’s main petrochemical business, it plans to shift to more environmentally friendly products such as bioplastics and bio-super absorbent polymer.
It is to look for new growth in plastic recycling operations, as well as materials used in solar panels, the statement said.
In life sciences, LG Chem plans to spend more than 1 trillion won to enter markets in the US and Europe by becoming a global pharmaceutical company that has more than two new drugs.
“We’re no longer a traditional petrochemical company,” Shin said. “Based on the technology and solutions we’ve accumulated over 70 years, we’re now a materials science company with a growth centered around sustainability.”
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