LG Chem will invest 10 trillion won (US$7.7 billion) by 2025 to accelerate the commercialization of three new growth drivers.
“We will speed up the commercialization of our three new growth engines and reorganize our business structure to focus on businesses with high market value,” Vice Chairman Shin Hak-chul said at the 22nd regular shareholders’ meeting held at LG Twin Tower in Yeouido, Seoul on March 28. “We will elevate our sales to about 30 trillion won [US$23 billion] a year.”
The three new growth drivers are battery materials, sustainable solutions centered on eco-friendly materials, and new global drugs.
In the case of battery materials, LG Chem plans to expand its customer base based on differentiated technology and securing local production bases in the United States and Europe. In addition, it will strengthen its business competitiveness for the entire value chain by securing competitive metals and cooperating with battery recycling companies.
The sustainable solution business promotes active external cooperation in all areas that are being implemented, such as recycling, bio materials, and securing carbon reduction technologies, and focuses on securing business capabilities. LG Chem will foster the sustainable solution business as a key driver of its growth.
LG Chem said that it took the first step to become a global new drug company through the acquisition of Aveo. It is a strategy to secure competitiveness in becoming a global pharmaceutical giant with innovative new drugs by securing commercialization capabilities in the United States by successfully completing M&As and continuously expanding new drug pipelines.
“We are considering investing in a cathode material plant in Europe,” Vice Chairman Shin said in a meeting with reporters after the regular general shareholders’ meeting. “It is due to the European Critical Raw Materials Act (CRMA).”
A draft of the CRMA, called a European version of the Inflation Reduction Act (IRA), aims to reduce the country’s dependence on strategic raw materials from certain countries to less than 65 percent by 2030. It also aims to expand the local mining, smelting, and refining and recycling of 16 strategic raw materials such as lithium and nickel to 10 percent, 40 percent, and 15 percent of their annual demand.
When LG Chem confirms a cathode material plant site in Europe, LG Energy Solution to LG Chem will complete a quadrilateral production system following Korea, China, and the United States. LG Chem’s Wuxi plant in China is producing 45,000 tons of cathode materials annually. In the U.S., it is planning to secure an annual production capacity of 120,000 tons in Tennessee with the IRA as an opportunity.