LG Chemical will spend $8.7 billion to strengthen Battery Business

Published: Jul 15, 2021 08:40

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[LG Chemical will spend US $8.7 billion to strengthen battery business] according to foreign media reports, LG Chemical will spend 10 trillion won (US $8.7 billion) by 2025 to accelerate the sustainable growth of battery materials business and other business lines, and together with other South Korean industrial giants, begin to shift to more environmentally friendly practices. According to a statement issued by LG Chemical on July 14, the company will invest Won6,000bn to expand its production line of battery materials, including cathodes and battery separators, and another Won3,000bn to produce environmentally friendly petrochemical products. The rest of the investment will be spent on the company's life sciences business.

According to foreign media reports, LG Chemical will spend 10 trillion won ($8.7 billion) by 2025 to accelerate the sustainable growth of its battery materials business and other lines of business and, along with other South Korean industrial giants, begin to shift to greener practices.

According to a statement issued by LG Chemical on July 14, the company will invest Won6,000bn to expand its production line of battery materials, including cathodes and battery separators, and another Won3,000bn to produce environmentally friendly petrochemical products. The rest of the investment will be spent on the company's life sciences business.

"this is the most innovative change since the company was founded and will further enhance the value and sustainability of the company," Shin Hak Cheol, CEO of LG Chemical, said at a news conference in Seoul. Starting from the second half of this year, we will be able to see tangible results. "

South Korean industrial giants have announced large-scale investment plans to reduce their carbon footprint and promote sustainable growth. SK Innovation said earlier this month that it would invest 30 trillion won by 2025 to strengthen its green business portfolio, mainly in battery and plastic waste recycling. Rakuten Chemical (Lotte Chemical Corp.) said on July 13 that it would invest 4.4 trillion won by 2030 to increase hydrogen production.

"We will transform our business portfolio based on environment-related businesses, and we will demonstrate that we can achieve sustainable growth." Shin said.

LG Chemical's heavy investment in battery materials comes at a time when demand for electric vehicles is soaring. The company expects the size of the battery material market to grow from 39 trillion won in 2021 to about 100 trillion won in 2026.

LG Chemical said that benefiting from the increase in demand, it would set up a cathode material production facility with an annual capacity of 60, 000 tons in the South Korean city of Guiwei from December. LG Chemical expects its cathode material production to rise from 40, 000 tons in 2020 to 260000 tons in 2026.

In addition, LG Chemical is seeking mergers and acquisitions or joint ventures in the battery separator business, with plans to build a manufacturing plant overseas and further expand the production of carbon nanotubes. Shin said that in order to ensure a stable supply of cathode export metals, LG Chemical is forming a joint venture with a mining company to improve its procurement competitiveness.

LG also hopes to maximize its partnership with its battery division LG Energy Solution by expanding its product line of battery materials. LG Energy Solution has applied to the Korean Stock Exchange for a preliminary review of the initial public offering ((IPO)). Shin said, LG Energy Solution could list within this year, adding that LG Chemical would continue to maintain a 70 to 80 per cent stake in the company.

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