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| LG Chem employees produce electric vehicle batteries at the company's Ochang factory in North Chungcheong Province, Friday. / Courtesy of LG Chem |
By Yoon Sung-won
OCHANG, North Chungcheong Province ― LG Chem has pledged to foster its energy, water and bio sectors as its long-term growth engines while continuing to solidify its presence in the global electric vehicle (EV) battery market.
Underlining the importance of preemptive change amid market uncertainties, LG Chem vice chairman and CEO Park Jin-soo said the company would accelerate technology development, expand investment and seek mergers and acquisitions for the three sectors.
"The current business environment is tougher than ever amid prolonged low growth, low interest rates, increased consumer prices, unemployment and debt," Park told a press conference at the company's battery manufacturing factory here, last week.
"But no matter how difficult the environment may be, we need to continue growth in our own way. I believe that energy, water and green bio solutions are what we must foster to become a company that will last over 100 years."
Citing the U.S. National Intelligence Council, Park said global demand for energy, water and food resources would rise by 50 percent, 40 percent and 35 percent, respectively, by 2030, with the global population having increased to 8.3 billion from 7.3 billion in 2015.
He said such changes meant market demand for the three new sectors would rise accordingly.
In the energy sector, Park said LG Chem would focus on eco-friendly automobile materials such as engineering plastic, new battery technologies, thermoelectric materials and fuel cell materials.
Park also said the company would invest 40 billion won to build a second reverse-osmosis (RO) water treatment filter manufacturing line in Cheongju, North Chungcheong Province, and planned to operate the plant by the end of the year.
He expected the company might follow the world's leading businesses, such as Japanese chemical company Toray, in the seawater desalination sector.
"In the water treatment filter sector, products for seawater desalination are considered the most difficult to build and we are one of the best businesses in this sector around the globe," Park said.
"Once we expand our manufacturing facilities, we may boost our market share from the current 10 percent level to meet the level of market leaders such as Toray by 2018."
The CEO also stressed an aggressive move for mergers and acquisitions in the green bio sector, which would be an area for the company.
The green bio business can be compared to the red bio and white bio industries, which respectively focus on medical and eco-friendly industrial materials made from organic sources.
"We are focusing on the green bio sector because the value of chemical products that protect crops and seeds will increase when food demand increases," Park said.
"I cannot elaborate further, but we will develop technologies and seek mergers and acquisitions to expedite the business."
The Ochang factory is the world's largest manufacturing facility for EV batteries. It can produce about 50 million cells a year, which is enough to supply more than 10,000 Hyundai Motor Sonata hybrid EVs, according to the company.
It has boosted production capacity six times since the factory started operating in 2009.
As the world's top car-battery maker providing batteries for global carmakers including General Motors, Ford, Renault, Audio, Volvo, Hyundai Motor and Kia Motors, LG Chem expects to record about 1.2 trillion won in EV car battery sales this year, up 20 times from 60 billion won when it entered EV battery business.
As a result of concentrating on the lithium-ion battery sector, the company has developed advanced manufacturing and battery technologies such as stack and folding and safety reinforced separators (SRS).
The stack and folding technology allowed the company to utilize the maximum energy density in a cell while the SRS technology boosted safety and capability, LG Chem said.
"Added to the stability and performance of batteries, we have price competitiveness because we have sizable manufacturing scale and an advantage as a material producer," Park said.
"Regardless of the oil price, tougher carbon emission regulations will be more influential in the EV sector. This means the market for EVs will continue to grow due to environmental issues, even when the oil price drops."
The CEO also said the company would push for the energy storage system (ESS) business as much as for the EV batteries.
"The market for ESS will reach around 15 to 16 trillion won by 2020," he said. "We are concentrating on this sector as much as we are on the EV battery business.
"We have price competitiveness and will provide products to the global markets such as the U.S., Europe, China and Japan."
