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| LG Chem CEO Shin Hak-cheol speaks during a virtual press conference at the firm’s headquarters in Seoul, Wednesday. Courtesy of LG Chem |
Chemical firm’s wholly-owned subsidiary, LG Energy Solution, to go public within this year
By Baek Byung-yeul
LG Chem will invest 10 trillion won ($8.7 billion) until 2025 to develop eco-friendly materials, rechargeable battery parts and pharmaceutical products. The leading chemical company views those three businesses as its new growth engines, CEO Shin Hak-cheol said Wednesday.
Shin said the company has come up with a new business portfolio in a bid to achieve sustainable growth at a time when the pursuit of environmental, social and corporate governance (ESG) is becoming more important.
Of the 10 trillion won, 3 trillion won will be spent on eco-friendly materials, 6 trillion won on rechargeable battery parts and 1 trillion won to develop new drugs.
“When it comes to assessing the performance of a company, sustainability should be a prerequisite and this value must be reflected in every business process, strategy and investment,” Shin said during a virtual press conference. “From this perspective, we will innovate our business portfolio based on ESG and pursue sustainable growth.”
The CEO revealed that the company will list shares of its wholly-owned battery-making subsidiary, LG Energy Solution, on the main Korea Composite Stock Price Index within this year as it takes steps toward an initial public offering.
LG Chem filed a preliminary application to the Korea Exchange in early June for the IPO.
“The procedures for listing LG Energy Solution shares are proceeding quickly. If everything goes smoothly, we expect the company will be listed as early as this year,” the CEO said.
Shin added that LG Chem will continue to hold around a 70 percent to 80 percent stake in LG Energy Solution even after the subsidiary is listed on the stock market.
In December 2020, LG Chem’s battery business unit launched a standalone company to draw additional funds through an initial public offering (IPO) to improve its battery production capacity.
Among the 10-trillion won investment plan, the largest amount of money will be used to develop materials for batteries to capitalize on the fast-growing electric mobility battery business. Under the scheme, LG Chem will focus on improving the production capacity of various materials for batteries such as cathodes, anodes, separators and adhesive products.
LG Chem aims to become the industry-leading cathode material company as it begins construction of a cathode-making plant in Gumi starting this December. With the new factory, which will have an annual production capacity of 60,000 tons, LG Chem’s cathode production capacity will rise to 260,000 tons in 2026 from around 40,000 tons last year.
The company added it is currently in talks to set up a joint venture to secure a stable supply chain of metals for lithium-ion batteries. For the separator business, the company is considering both corporate acquisitions and establishing a joint venture with other companies.
In the chemical business, the company will pour 3 trillion won into eco-friendly materials to improve the production capacity of recycled and bio materials. The remaining 1 trillion won will be used for new drug development to roll out more than two new drugs in advanced markets, such as the United States and Europe.
LG Chem to invest W10 trillion in next-generation businesses
Source: Buhay Kapa PH
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