LG Chem logged its best-ever business performance in 2017 since its establishment, riding on the success of the global petrochemical product boom and turning a profit in the battery business. The company chalked up 25.69 trillion won in sales and 2.92 trillion won in operating profit, equivalent to earning 56.1 billion won in profit weekly. At an IR session at the LG Twin Tower in Yeouido, Seoul, on Jan. 31, LG Chem announced the 2017 business performance results. The 2017 figures represent a 24.4 percent jump in sales and a 47 percent jump in operating profit compared to the previous year.
The rate of operating profit to sales surged 11.4 percent, up 1.8 percentage points from 9.6 percent. The company posted 6.43 trillion won in sales and 615 trillion won in operating profit for the fourth quarter of last year, representing a 16.7 percent surge and a 33.2 percent jump over the same period of 2016, respectively.
Such petrochemical products as ethylene, engineering plastic, and PVC led the charming business performance. The business sector of basic materials for producing petrochemical products accounted for 2.8 trillion won, or 96 percent of the total operating profit.
Petrochemical products are in short supply thanks to the improving global economy. The battery and information electronics businesses, as well as Farm Hannong, a subsidiary of LG Chem, turned a profit.
LG Chem CFO Chung Ho-young said, “The basic material sector saw across-the-board profits, and battery and information electronics businesses turned around to a profit to log the best-ever achievements in terms of sales and operating profit.”
LG Chem’s key investment involves making preparations for the advent of the 4th Industrial Revolution. The company has established a plan to create differentiation values for customers and lead markets by making massive investments in such core business sectors as basic substances, electronics, information electronics materials and life science. To this end, LG Chem poured 2.76 trillion won into facility capital expenditure last year, a 40 percent jump over the previous year, to upgrade the competitiveness of the conventional businesses and nurture new businesses.
LG Chem aims to become a global top-five chemical company by 2025 through business structure upgrades and R&D concentration tailored to correspond to each sector’s structural features. The company is accelerating efforts to upgrade its business portfolio with a focus on value-added businesses in the basic material sector and the nurturing of promising future materials.
LG Chem set up a line at the Yeosu plant that specializes in producing 400 tons of carbon nanotube (CNT) annually. It went online in January 2017. The company, which plans to operate the CNT line at full capacity, is considering expanding the facility in 2019.
LG Chem plans to secure an upper hand in terms of price, performance and safety in the battery sector through preemptive R&D activities. The move is designed to secure a cutting edge in landing large projects related to 3G EVs that can run greater than 500 kilometers. The company is accelerating a business structure shift focusing on producing innovative products optimized for advanced smart gadgets and new markets in the small-sized battery sector.