LG Chem boost R&D efforts

By Kim Yoo-chul

LG Chem, the nation's biggest chemical company is increasing research investment to remain ahead of the pack in areas such as rechargeable batteries.

The firm announced Sunday that it would beef up its research and development (R&D) capacity by recruiting four executive-level leaders.

The new faces will work on an incentive system. They will receive individual performance evaluations just once every three years, which the company said will improve long-term corporate competence.

LG Chem, the top maker of hybrid lithium-ion batteries used in electric vehicles (EVs), also said that it plans to hire 500 R&D-focused employees this year, a double-digit percent rise from 2010, as LG also looks to continue its leadership in petrochemicals.

``R&D is now the focus for us. By introducing competitive reward systems, LG will allow R&D-related units and personnel more authority,’’ LG spokesman Song Choong-sup said.

LG Chem is striving to aggressively raise its international profile by capitalizing on batteries amid global green initiatives. It currently has eight automakers including GM and Ford as clients and is ready to disclose new deals soon.

It ended its best year in terms of profit and sales and is expected to enjoy another record year with rosy expectations in batteries and LCD glass, in addition to its traditionally-strong petrochemicals unit.

Royal Bank of Scotland (RBS) Securities raised its target prices on the LG shares to 515,000 won from current 460,000 won citing the rocketing demand for EVs amid higher oil prices and the gradual recovery of the global liquid crystal display (LCD) market.

Other brokerages echoed similar positive prospects.

``LG Chem shares are undervalued and its glass business for LCDs will help its earnings,’’ Dongbu Securities said while adding the steady injection of resources in R&D makes sense.