LG Chem vice chairman and CEO Park Jin-soo said the nation’s top chemicals maker will pour more resources into its materials business, pledging to double sales in specialty materials and batteries by 2018. “We are working on new materials that will change the future,” Park said Friday in a press conference held at the company’s plant in Yeosu, South Jeolla Province.
“Currently, petrochemical products make up 75 per cent of our revenue. We aim to reduce that figure to 60 per cent by 2020, while the remainder will be made up of value-added materials.” As part of efforts to seek new growth engines, LG Chem has greatly invested in new materials ranging from basic materials like engineering plastics and super absorbent polymers to lithium-ion batteries for electric vehicles.
These are higher-margin materials that have a great potential to grow in the coming years, officials said. The company is currently forecasting sales of 6 trillion won (S$7.4 billion) in that area alone for 2015. It expects the figure to double to 12 trillion won in 2018. LG Chem aims to become a global top three manufacturer of engineering plastic, whose demand is surging for diverse applications across industries. Its automotive sales will be elevated to 50 per cent from the current 30 per cent. The company is also pinning high hopes on a super absorbent polymer, which is widely used in baby diapers, as it can absorb and retain an extremely large amount of liquid.
With the expansion at its Yeosu plant complete within the year, its production capacity will surge to 360,000 tons per year, the fifth-largest globally. The CEO also hinted that the company could build a new plant abroad, citing the market potential. LG Chem, the No. 1 maker of lithium-ion batteries, the key component for electric vehicles, has recently extended ties with global carmakers to further widen the gap with its rivals. “We have secured the technology to elevate the driving range of electric vehicles to 400 to 500 kilometers,” Park said. Currently, most full-electric vehicles drive less than 200 kilometers on a single charge.
“It will not take long to produce the products,” he added, declining to further elaborate. In line with these plans, the company plans to double investment into research and development activities from the current 600 billion won to 900 billion won by 2018, and increase the number of researchers to 4,100 over the next three years.