LG Chem to Invest $5.2 Billion in Battery Materials

LG Chem's Significant Investment in Battery Materials

LG Chem, a leading South Korean chemical company, has committed ₩6 trillion (approximately $5.2 billion) to expand its battery materials business over the next four years.

This substantial investment is driven by the growing momentum towards electric vehicles, as both automotive manufacturers and government bodies establish goals for phasing out internal combustion engine vehicles.

Focus Areas for Investment

The allocated funds will be strategically directed towards increasing the production capacity of crucial battery components.

Anode materials
Separation membranes
Cathode binders
Other essential battery elements

A key component of this expansion involves the construction of a large-scale cathode plant in Gumi, South Korea.

This new facility will dramatically increase LG Chem’s anode production capacity, growing from 40,000 tons currently to approximately 260,000 tons by 2026 – a seven-fold increase.

Initial investment of ₩500 billion ($424 million) for this plant was previously announced in July 2019.

Expanding Production of Advanced Materials

LG Chem is also prioritizing the expansion of its carbon nanotube (CNT) production.

Output is planned to increase from 1,700 tons this year to more than triple that amount by 2025.

This will be achieved through scaling up production at its existing CNT Plant 2 and initiating construction of a third CNT plant in the current year.

Strengthening the Supply Chain

To secure a reliable supply of raw materials, LG Chem is establishing a joint venture with a mining company.

The company intends to actively collaborate with businesses specializing in mining, smelting, and refining technologies to enhance its sourcing capabilities for metals and other battery component materials.

Market Position and Growth Projections

LG Chem is already a major player in the battery and battery materials market, serving prominent customers such as Volkswagen, General Motors, and Tesla.

The company anticipates significant growth in the global battery materials market, projecting an increase from ₩39 trillion ($34 billion) in 2021 to ₩100 trillion ($87 billion) by 2026.

Diversification into Sustainable Areas

In addition to battery materials, LG Chem will invest ₩3 trillion ($2.6 billion) in sustainable petrochemicals, including biodegradable polymers and plant-based bio-materials.

A further ₩1 trillion ($872 million) will be allocated to its pharmaceutical development division.

Commitment to Sustainability

CEO Hak Cheol Shin emphasized the company’s dedication to transitioning towards a more sustainable business model.

He stated that this transformation represents the most significant change in the company’s history, promising enhanced value and sustainability, with tangible results expected from the latter half of the current year.