By Kim Yoo-chul
Honam Petrochemical, the chemical affiliate of Lotte Group, aims to expand its business horizons to the promising rechargeable battery business as part of efforts to attain its long-term growth target.
Honam said Sunday that the country's No. 2 ethylene producer has formed a strategic alliance with ZBB Energy of the United States to produce zinc-bromide flow batteries.
The ultra-sized batteries could be used in energy storage systems as they capture and store electricity produced by solar panels or wind turbines.
Under the agreement, the two outfits will work on sharpening related technologies in the batteries, which they hope will become a major part of Korea’s nationwide smart-grid project.
Asia's fourth-largest economy plans to invest $103 billion in eco-friendly technologies including those for smart grids, the sophisticated electricity networks, over the next decades.
Honam officials confirmed their goals of making energy storage businesses as one of its future growth engines in line with the government's strong initiative for green energies.
"Honam aims to commercialize the advanced battery tech by 2015 to achieve our objective of becoming Asia’s top chemical company with an annual revenue of 40 trillion won in 2018," said the CEO Chong Bum-shick in a meeting with reporters over the weekend.
Honam is set to pay a total of $3 million to ZBB in exchange for gaining rights to sell the batteries across Asia, including exclusive rights to make and sell them here, according to officials.
"Such large-sized batteries mainly used in industrial applications are totally different from portable batteries for electric vehicles pushed by LG Chem. Honam's paths are different," Chong said.
The chief executive also added Honam has been in the phase to develop materials for secondary batteries but were denied over its plan to advance into the solar-cell business sector.
"In solar-cells, there are worries over oversupply. This is not the right time for us to dip our toes into the water," Chong said.
In addition, Honam vies to complete its long overdue mission ― the acquisition of its subsidiary KP Chemical.
It might finish possibly by the end of this year as Honam is seeking faster business expansion and revenue growth in Asia.
"We will try to acquire KP Chemical within this year because we need to grow sizes for an effective penetration outside the nation," the chief executive said.
In 2009, Honam failed to acquire KP Chemical due to strong resistance from minority shareholders.
Chong said he himself will attempt to get the green light from minority shareholders, who hold 43 percent shares of KP Chemical.
KP Chemical, which is 52 percent owned by Honam, has production bases in Korea, the U.K. and Pakistan.
In a related move regarding expansion, Honam acquired Malaysia’s Titan Chemicals for 1.5 trillion won last year.