LG Chem Vice Chairman Park Jin-soo. (Photo: LG Chem)

LG Chem plans to invest 1 trillion won in R&D outlays this year. LG Chem Vice Chairman Park Jin-soo revealed his plan in a meeting with reporters at LG Technology Research Institute in Daejeon on March 31.

“R&D outlays will increase 10 percent every year,” Vice Chairman Park said. 

This is the first year that LG Chem will see its R&D outlays surpass 1 trillion won annually, the largest-ever among Korean companies. Last year, the company poured about 780 billion won into R&D investments.  

“Investing 1 trillion won in R&D, which amounts to more than 4 percent of sales, is higher than that of global chemical companies,” he said. BASF and Dow Chemical’s R&D investments vs. sales stood at 3.8 percent and 3.3 percent as of 2015, respectively.

Vice Chairman Park said, “LG Chem aims to be an R&D mecca through the exploration of technologies spearheading market paradigm trends.” To this end, he said, LG Chem plans to raise R&D investments to 1.4 trillion won and increase research manpower from the current 5,300 to 6,300 in 2020. 

In a reshuffle designed to ramp up R&D carried out last year, President Yoo Jin-nyung of the LG Technology Research Institute was appointed to chief technology officer. LG Chem will focus on energy, water, bio, and next-generation new materials, and the company will see sales in new businesses through R&D surge 8.5 trillion won this year to 16.3 trillion won in 2020, he said. By investment area, research in the EV battery segment will account for 30 percent of the company’s total R&D outlays. The portion of R&D investments in basic materials, information electronics and life science fields will range from 10 percent to 20 percent. 

Aims to be Global Top 5 Chemical Company by 2025

LG Chem aims to be among the top five chemical companies in the world. To this end, the company plans to expand its business portfolio to include core business areas such as basic materials, batteries, information electronics and life sciences and reinforce R&D activities for the future. It will also prepare for an entry into the bio industry through a merger with LG Life Sciences.

The Basic Materials & Chemicals Business Division is restructuring its business portfolio, shifting into value-added synthetic resins, engineering plastics, high-absorbent resins, high-performance synthetic rubber. The company is fostering future materials products to maintain a competitive edge in the global market.

The Energy Solutions Business Division has a strategy to maintain the No. 1 position in winning mega-projects. That strategy includes maintaining a competitive edge in terms of price, function and safety through preemptive R&D activities. The division plans to make aggressive inroads into the energy storage system (ESS) market by releasing products with functions differentiating itself from its rivals and a giving itself a competitive edge on price. It has worked out strategies to advance the restructuring of its business portfolio by exploring new markets with innovative products outfitted with small batteries and optimized for the latest smart gadgets.

The IT and Electronic Materials Business Division plans to improve the profitability of such conventional business areas as polarizers and 3D film-type patterned retarders (FPR). The division plans to strengthen the competitiveness of such new business areas as functional films and water solutions businesses. In particular, the division aims to solidify the No. 1 position in the global polarizer market, which is predicted to maintain an annual growth rate of more than 30 percent by expanding polarizer lines in China. 

Ever since LG Chem became the first company to commercialize LCD polarizers in 2000, the business division has steadily grown through aggressive investment in R&D and the development of differentiated products. As a leading global company in the polarizer market, LG Chem has also been strengthening global competitiveness in the areas of ITO Film, touch panels, and circuit board materials.

The Life Sciences Business Division plans to nurture Zemiglo, Korea’s first new drug to treat diabetes, into a leading product. The division plans to accelerate efforts to develop new drugs to become the nation’s leader in the metabolic disorder and bio medicine segments. It also wants to explore overseas markets. It plans to advance the release of such drugs as diplococcus pneumoniae and LDVD, a mixed vaccine for the prevention of diphtheria, tetanus, pertussis, hepatitis B, Haemophilus Influenzae type b (Hib), and poliomyelitis by conducting their clinical tests in Korea and abroad.