LG's 2021 keywords: Quality, safety, environment

LG Group Chairman Koo Kwang-mo, right, looks at an EV battery model under development in this file photo. / Courtesy of LG

By Kim Bo-eun

LG Group has identified key areas of focus as it enters a tougher business environment next year.

In a recent meeting with CEOs of major affiliates, LG Group Chairman Koo Kwang-mo presented “quality, safety and environment” as the group's next year core initiatives, according to LG, Monday.

"Let each of the members of the group work with a sense of responsibility that LG products are those used by my family members and LG is where my family members work," Koo was quoted as saying at the meeting in a press release by the group.

The latest online meeting convened 40 top executives of LG Group. They included Vice Chairman and LG Household & Health CEO Cha Suk-yong, LG Vice Chairman Kwon Young-soo, Vice Chairman and LG Chem CEO Shin Hak-cheol and LG Electronics CEO Kwon Bong-seok.

The executives agreed it would be critical to seek new opportunities in an increasingly challenging environment with increased uncertainties amid the spread of the COVID-19 pandemic.

They also agreed the group should seek “qualitative growth” over quantitative or simply profit-centered expansion. They referred to qualitative growth as "accumulating assets for future growth such as a customer base and data, to expand sales that can bring up the value of various lines of business."

The leadership concluded more professional individuals would be sent and assigned to divisions assuming key roles in areas such as R&D, digital transformation and product planning.

Digital transformation is among LG's key tasks. LG has sought to set up a cloud computing environment, with a goal of having over 90 percent of work processes conducted in this by 2023.

The executives plan to solidify the group's customer base, and product portfolio of major businesses spanning from OLED displays to batteries and 5G.

Koo, who took the helm of the group in 2018, is assessed to be taking bold measures to fine tune units to focus on businesses driving future growth in accordance with the group-wide shift toward growth from stability.

LG has brought in outside experts to lead businesses identified as key growth engines. Koo appointed Shin Hak-cheol, the former executive vice president of chemical manufacturing giant 3M as LG Chem's new CEO in late 2018.

LG Chem, the chemical and battery-making affiliate of the group, has since taken steps to downsize its LCD polarizer business to focus on material business for automobiles and batteries for electric vehicles (EVs). LG is among top players in the global EV battery market, along with China's CATL. The group this year spun off LG Chem's EV battery business into a new unit, LG Energy Solution.

A strategic decision was unveiled this year to split off the group's units that are less relevant to LG's main business in electronics, EV batteries and telecommunications. Koo's uncle Koo Kwang-mo will head a cluster of LG affiliates including LG International and Hausys.

Koo has already identified artificial intelligence (AI) as a core growth engine for the group. With this goal, the young chairman is seeking to concentrate investment in AI research and development. LG launched LG AI Research earlier this month. Group affiliates will invest 200 billion won into the think tank.

LG has invested in innovative AI companies through the group's venture investment unit LG Technology Ventures, as well as LG Electronics' venture investment fund. Investments have been made into the sectors of robotics, mobility and AI.

Expectations are that Koo's first major-scale acquisition will be in the AI sector in the coming years.

The group has also focused on robotics ― commercializing a total of six robots ― including information bots, home bots and chef bots. LG Electronics is set to export a self-driving robot to the U.S. next year. It is aiming to expand its robot business in the B2B market targeting industries such as hotels and public facilities.