LG Chem has selected three new growth engines that will be in accordance with ESG, while maximizing the growth potential of existing businesses.  The company’s CEO Hak Cheol Shin announced investment plans worth 10 trillion KRW in ESG-based sustainable growth sectors like eco-friendly sustainable business, e-mobility centering on battery materials and global innovative new drugs. Shin said, “The standard for measuring competitiveness in the business world should be based on sustainability for revenue and operating profits, and this should be reflected in all business processes, strategy, and investment, etc.” He added, “From this perspective, our business portfolio will be overhauled toward being based on ESG, while pursuing sustainable growth.” Plans are to invest 3 trillion KRW in sustainable businesses such as bio materials, recycled materials, and renewable energy industry materials to build a platform for the future growth of the petrochemicals company. The company plans to begin full-scale production of the world’s first bio-balanced SAP product that received ISCC Plus certification from this month, and supply them to global clients such as the US and Europe. The bio plastic market is expected to rapidly grow from 12 trillion KRW in 2020 to 31 trillion KRW by 2025. Therefore, JVs with domestic and foreign raw material companies are being actively pursued for stable sourcing of eco-friendly raw materials like PLA made with plant-based ingredients such as corn and bio naphtha. It will also focus on enhancing its mechanical and chemical recycling capacities to build a circular economy for waste plastics. For mechanical recycling, plans are to strengthen the existing market power of PC and ABS, while expanding the product portfolio to include PO and PVC, while increasing related product revenue by an annual average of more than 40% by 2025. For chemical recycling with high likeliness for long-term growth, the strategy entails finding and preoccupying platform technologies with good potential. Meanwhile, LG Chem is also establishing an eco-platform for 100% circulation of plastic resources for cosmetic product containers together with the start-up, innerbottle, to provide eco-friendly packaging solutions, while also engaging in joint research to apply recycled plastic materials such as PCR (Post Consumer Recycle) ABS, etc. in cosmetic product containers. Furthermore, it plans to actively look for new business opportunities in the renewable energy industry materials market such as POE/EVA for solar power panels. As the generation cost for renewable energy such as solar power and wind power are becoming less expensive than fossil fuels in the US and China, renewable energy markets are growing rapidly. In order to become the world’s no. 1 comprehensive battery material company, LG Chem plans to invest 6 trillion KRW and foster the portfolio widely ranging from anode materials, separation membranes, cathode binders, radiant adhesives, CNT, etc. Plans are to commence construction of the Gumi Plant with a 60,000-ton capacity in December for the anode material business with the goal of fostering the company into a global leader. Through this, the anode production capacity of LG Chem will increase by roughly seven-fold from 40,000 tons in 2020 to 260,000 tons by 2026. A JV is being prepared with a mining company for the stable supply of metals that will be used as the raw materials for anode materials. LG Chem will actively pursue cooperation in various ways with companies possessing mining, smelting and refining technologies to strengthen its metal sourcing competitiveness. For the separation membrane business, LG Chem is reviewing M&As and JVs with companies having marketability such as technologies and clients to quickly enhance business capacities, while also planning to build a global production base as soon as possible. For products such as anode materials, cathode binders, and radiant adhesives, LG Chem plans to preemptively focus R&D resources to differentiate its technologies and acquire market leadership. This is because in the battery materials market that is expected to grow quickly from 39 trillion KRW in 2021 to 100 trillion KRW by 2026, it is anticipated that demands for material innovation will strengthen for the sake of improving performance and cutting costs. In order to keep up with the market forecast for battery materials that are growing at a rapid pace, the company plans to expand the CNT production scale of the Petrochemicals Company from 1,700 tons in 2021 to triple or more by 2025. LG Chem expanded its production capacity by completing the CNT Plant 2 capable of producing 1,200 tons per year to target the anode conductive additive market for lithium-ion batteries in April, while continuously expanding production capacities such as making preparations to start construction of Plant 3 within this year. The Life Sciences Company will invest more than 1 trillion KRW in the new drug business alone with the goal of becoming a global new drug company holding two or more new innovative drugs by 2030 to enter advanced markets such as the US and Europe. The Life Sciences Company has accelerated efforts to develop new drugs by expanding the new drug pipelines from 34 in 2019 to 45 as of now in 2021 and focusing on R&D investment. In particular, the Life Sciences Company is concentrating its development capacities in the four strategic disease groups of diabetes, metabolism, anti-cancer, and immunity, which has strengths in. Plans are to expand new drug pipelines that entered the clinical development stage from 11 in 2021 to 17 by 2025. For this, it is actively reviewing various open innovation strategies including M&As and the establishment of JVs, while also establishing a research firm in the US and continuously procuring personnel with expertise in clinical studies/licensing to further strengthen its global clinical development capacities. Shin commented, “It is essential to switch the business portfolio based on ESG to respond to the market and clients that are rapidly changing.” As per Shin, there are currently over 30 projects including M&As, joint ventures (JV), strategic investments, etc. under review to cooperate with external companies having the relevant technologies and clients.” Shin also stated, “As the most revolutionary change since the establishment of the company that will upgrade the value and sustainability of LG Chem has already begun, tangible achievements will become available from the second half of this year.” 

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