LG Chem CEO upbeat

By Kim Yoo-chul

Staff reporter

The chief executive of South Korea's LG Chem said the LG Group petrochemical affiliate has been in an expansionary phase.

The primary signposts for the upbeat projection include its increased battery and petrochemical presence worldwide. LG Chem is aiming to strike at least 2 trillion won in annual sales in batteries alone in 2015.

"LG Chem isn't just a petrochemical company anymore. We are proving that petrochemical companies can diversify and manage rechargeable battery businesses as well," said Kim Bahn-suk in a meeting with reporters late Thursday.

The meeting was the first time in three years that Kim, who is also the vice chairman of the company, has appeared in person at an organized meeting since 2007. Kim has been known as a reclusive leader, at least when it comes to talking to the media.

The CEO made the headlines of the nation's leading newspapers when U.S. President Barack Obama paid a visit to Holland, Michigan, for the groundbreaking of LG Chem’s battery plant earlier this month.

In mid-July, LG Chem said its U.S. unit Compact Power will provide rechargeable batteries for Ford’s Focus compact car due out next year. That was the second big win for LG, which was also chosen last year by General Motors (GM) to provide batteries for its Chevrolet Volt plug-in hybrid.

Kim, who believes the rechargeable business is the firm’s next critical revenue source, said LG has already sealed deals with three or four carmakers in Europe and Japan.

"I can't name the lists of our new clients due to the sensitivity of the issue. LG Chem is waiting for the right timing for the announcements," Kim said. LG currently has seven clients to which they are supplying or will supply lithium-ion batteries including Hyundai-Kia, Ford Motor, Volvo, Eaton and GM.

"The growth phase will accelerate if performances of LG's new earnings drivers start to take off," according to the top executive.

Over the last full year, LG Chem reaped 2.1 trillion won operating profits, up from the 1.4 trillion won in 2008. In 2007 and 2006, it took in 1 trillion won and 500 billion won, respectively.

But Kim said the growth numbers didn't include performances of its rising cash-cows ― batteries and LCD glass.

When asked about the possibility of achieving this year’s operating profit target of 2.5 trillion won, he said, "that's highly achievable." LG Chem booked 1.5 trillion won profit during the first half of 2010.