LG Chem normalizes US battery plant
By Kim Yoo-chul
Park Jin-soo LG Chem CEO
LG Chem CEO Park Jin-soo said Tuesday that its car battery making plant in the United States is getting back to normal after a brief suspension of operation.
The world’s biggest manufacturer of rechargeable batteries had halted production due to suppressed demand.
“We are normalizing our battery plant in Holland, Michigan. The factory is in the process of ramping up production after experiencing some troubles,” Park told reporters at a restaurant in Seoul, Tuesday.
The chief executive said foreign media reports about the situation at the U.S. plant were “exaggerated.”
“We are training our employees in the United States in preparation for more demand,” he said.
The U.S. government provided $150 million for the battery plant. The facility was initially intended to produce batteries for the Chevrolet Volt plug-in hybrid electric vehicle.
The facility opened in July 2010 with a groundbreaking ceremony attended by U.S. President Barack Obama but has yet to produce a single battery for the Volt, the troubled electric car from General Motors. The plant’s batteries were also supposed to be used in Ford’s electric Focus.
Park said he sees a mild recovery in the demand for electric vehicles. “LG Chem is well-prepared to effectively respond to client requests once demand for electric vehicles picks up. Unlike sluggish demand for electric vehicles, hybrid electric vehicles are becoming more popular.”
Referring to LG Chem’s strong client list, Park said the company is ideally-positioned to see external growth in its car battery-making business.
It has secured supply deals with 10 carmakers including GM, Ford, Hyundai Motor and Renault.
LG Chem said it isn’t using federal money to pay idle workers and will review any misspent money for potential refunds to the government.
The LG affiliate has been focusing on batteries as its main petrochemical products business is still suffering from weak global demand.
Park said unfavorable currency moves are hurting its profit, a little though the impact of the strong won should be “minimal.”
Although challenged by the rapid rise of Chinese chemical companies, LG Chem plans to tackle such challenging factors with more technology-driven premium products.
In line with those initiatives, Park said a massive investment project in Kazakhstan is going smoothly. “We will start building a petrochemical complex in the central Asian country from early next year with completion set for 2016,”.
In the liquid crystal display (LCD) glass business, seen as one of the firm’s future cash generators, Park said he will foster that business by pushing forward a plan to build one or two new lines through next year.
LG Chem has been collaborating with German-based Schott in LCD glass-related technologies and patents over the last few years.
It aims to reap 24.86 trillion won in revenue this year, up 7 percent from last year. It plans to increase its facilities investment by 2.2 percent to 2.12 trillion won.