Vice Chairman Park Jin-soo of LG Chem.

LG Chem will make substantial investments in its R&D, expanding it from 600 billion won now to 900 billion won annually in 2018, and increasing the number of research staff by 1,000 in 2018, Vice Chairman Park Jin-soo said recently.

The research activities will focus on environmentally friendly businesses such as fuel batteries and water treatment facilities as the company plans to push those two areas as future growth engines.

The company’s strategy stresses the growth of its fuel battery and water treatment facility businesses, the CEO said.

LG Chem already the exclusive supplier of filters for eight sea water treatment projects in five countries, making it a leader in the global market. The company recently sealed the biggest order for such filters since the company entered the market.

The company will also likely dominate the ESS sector, the key area of the environmentally friendly energy market, after signing a contract with AES Energy Storage to supply giga watt-level batteries for the first time in the ESS area, Park said.

LG Chem 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 recently 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 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 ($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. 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 annually, the fifth-largest globally. The CEO also hinted that the company could build a new plant abroad, citing 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 fewer than 200 kilometers on a single charge.

“It will not take long to produce the products,” he added. 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."

A scene inside LG Chem’s Lab.(Photos:LG Chem)