LG Chem to accomplish $50 billion sales in 2024
LG Chem CEO and Vice Chairman Shin Hak-cheol speaks during a media conference at LG Twin Tower in Seoul, Tuesday. / Courtesy of LG Chem
Company gearing up for Japan's possible export control
By Jun Ji-hye
LG Chem is aiming to increase its sales to 59 trillion won ($50 billion) by the end of 2024 from 31 trillion won this year by enhancing its business portfolio and expanding R&D activities, CEO and Vice Chairman Shin Hak-cheol said Tuesday.
By doing so, the nation's leading EV battery and chemicals producer is seeking to enter the global top five, Shin noted.
“We will promote sustainable growth based on three key businesses ― petrochemicals, batteries and high-tech materials,” he said during a press conference in Seoul.
Shin also said his firm has begun to map out contingency plans to brace for the possibility that Japan could expand export restrictions to raw materials used in electric vehicle (EV) battery production.
He said the company is studying a variety of scenarios related to Japan's moves and will overcome any possible impact of its export restrictions through diversification of suppliers.
“Currently, there is no significant impact on LG Chem as items subject to export restrictions for now are centered on materials used in the semiconductor sector. But we are preparing for any situation that could possibly occur,” he said. “We have begun scenario planning as nobody can jump to conclusions about the possibility for expansion of items subject to export control.”
Scenario planning helps a company to predict uncertainties and make plans accordingly.
Shin's comments come as a diplomatic row between Korea and Japan has developed into trade tension, with Tokyo having imposed restrictions last week on exports to Seoul of high-tech materials and chemicals used in semiconductor and display production.
The Japanese government is also moving to remove Korea from its whitelist of countries that have fewer restrictions on transfers of technology having national security implications.
According to Japan's Mainichi Shimbun, Tokyo is likely to expand items subject to export restrictions extensively to the automobile and chemical sectors later this month.
Shin said LG Chem has been working to diversify suppliers of materials used in EV battery production such as electrolytes in preparation for a worst-case scenario.
“We have secured necessary materials from two to three suppliers including Japanese and Chinese companies as well as European companies. Some materials have been localized as well,” Shin said. “We will accelerate our efforts to diversify suppliers.”
Japan has been protesting against last year's ruling by Korea's Supreme Court that Japanese companies, including Mitsubishi, must pay compensation to individual Koreans forced to work in their factories during World War II.
Japan is calling on Korea to accept its request to set up a third-party arbitration committee to deal with compensation claims for the Koreans. Japan made the request on June 19, and Korea is required to respond to the request within 30 days under the 1965 treaty that set up relations between the two.