A view of Indiana-based Uniseal, acquired by LG Chem. (Photo: LG Chem)

LG Chem is entering the auto adhesive market by acquiring U.S.-based automotive adhesive specialist Uniseal.

The move is part of LG Chem’s strategy to venture into the automotive adhesive market, which shows signs of high growth as market trends move toward lighter cars.

LG Chem is stepping on the gas to develop EV batteries. It is focusing on lighter of cars.

LG Chem said on Sept. 12 it acquired a 100 percent stake in Uniseal. The price of the acquisition is likely to stand at around 150 billion won.

Uniseal, founded as an auto adhesive specialist in 1960, has its headquarters and product facilities in Indiana. The adhesive specialist journal ASI selected Uniseal as one of the top 25 adhesive makers of 2018. Uniseal supplies GM, Ford and other North American automakers, and the company posted about 63 billion in sales in 2017.

Auto adhesives, substitutions for welding and bolts, are materials designed to contribute to make cars lighter. The auto adhesive market is on a constant rise in keeping with a trend of lighter cars. The market is expected to surge from 5.1 trillion won in 2017 to 6.5 trillion won in 2020 and 8.4 trillion won with a high annual growth rate of more than 8 percent.

LG Chem’s acquisition of Uniseal has secured a bridgehead to enter the automotive adhesive market, and the company plans to commercialize high-performance automotive adhesive sector by making the most of raw material technologies the company has accumulated, the company said.

LG Chem’s latest M&A adds another automotive material business to its business portfolio. LG Chem produces batteries, a core part of EVs, and positive electrode, one of EV raw materials. The company also supplies ABS (acrylonitrile butadiene styrene) resin, engineering plastic, automotive interior and exterior raw materials as well as adhesive tapes for EV batteries.

LG Chem Vice Chairman Park Jin-soo said, “Automotive adhesives have a high growth potential in line with a trend of lightening cars and the company plans to nurture the business to world-class standards through aggressive investments.”

LG to Supply EV Batteries to Vietnamese Automaker

LG Chem is accelerating efforts to explore the Southeast Asian EV battery market.

LG Chem signed an MOU with Vietnamese automaker VinFast to supply EV batteries and collaborate in businesses, it said on Sept. 10. LG Chem agreed to supply batteries for EVs and electronic scooters to VinFast as well as to jointly develop eco-friendly products and set up local joint-ventures.

VinFast, which opened in September 2017, is Vietnam’s first automaker. VinFast acquired GM’s plant in Hanoi in February 2018, and the Vietnamese automaker is building a car production line, to be operated in next 2nd quarter.

VinFast plans to mass produce EVs and electric buses starting 2021. The Vietnamese auto market saw a rapid growth with a three-fold jump in three years from 200,000 units in 2016.

VinFact is an electronic subsidiary of Vingroup, a Vietnamese conglomerate whose capitalization stood at around 16 trillion won to rank 1st in Vietnam. Under the MOU, LG Chem will supply batteries for smart phones to VinSmart.

The deal is part of LG Chem’s strategy to forge a strategic cooperation to tap the Southeast Asian market, which is expected to maintain rapid growth, an LG official said. The two sides plan to hold detailed negotiations on the supply of batteries.