LG Chem Vice Chairman Shin Hak-cheol unveils a vision of rising to a global top five chemical company at his first meeting with reporters at the LG Twin Tower in Yeouido, Seoul, on July 9 since he took office. (Photo: LG Chem)

LG Chem Vice Chairman Shin Hak-cheol said LG Chem aims to become one of the top five chemical companies in the world in next five years.

To this end, Vice Chairman Shin unveiled four core management tasks and mid- and long-term strategies at his first meeting with reporters since taking office, on July 9, at LG Twin Tower in Seoul.

Shin became the first outside top manager since the establishment of LG Chem.
Previously he had stints such senior executive vice chairman of 3M Company, a renowned American global innovation firm.

Vice Chairman Shin unveiled a vision of rising to a global top five chemical company, aiming to raise sales to 59 trillion won by 2024. LG Chem logged 28.2 trillion won in sales last year.

The company is forecast to see sales break the 30 trillion won threshold this year for the first time, with the goal of achieving a two-fold jump in sales in five years. Given the fact that the battery business is enjoying explosive growth and the chemical business is yielding steady profits, he said the goal would be attainable.

Shin said LG Chem will pursue four management tasks - market- and customer-oriented business process and portfolio; R&D innovation; raising efficiency of business operations; and the establishment of a globalized corporate culture. All business processes and portfolios will shift from a focus on products and technologies to a market- and consumer-oriented focus, he said.

Vice Chairman Shin stressed that LG Chem will ramp up the aspects of R&D it has been doing well. The company’s R&D budget will be raised to 1.3 trillion won this year, 200 billion won more than last year’s, and R&D manpower will increase to 6,200 people this year, 700 people more than last year.

Vice Chairman Shin revealed a mid- and long-term “three plus one” strategy.

LG Chem has designated petrochemical, energy solutions and advanced materials sectors as three growth axes. Furthermore, the company plans to nurture the bio sector like new medicines as a future growth engine from a long-term perspective.

A value-added product portfolio in the petrochemical sector will be expanded, while overseas market exploration will be made through strategic M&As, Shin said. The battery sector with technology competitiveness like EV batteries will have synergetic effects if it will be converged with the material sector such as auto electronics equipment, he said.

According to the plan, the petrochemical business’s share in LG Chem’s total sales will decline from 58 percent last year to 33 percent in 2024. On the other hand, the energy solutionsbusiness’s portion will increase from 22 percent to 49 percent during the same period.

The advanced materials business will see its share out of total sales almost remain unchanged: a little drop from 16 percent to 15 percent, but the business’s revenues will redouble from 4.7 trillion won to 9.6 trillion won.

As for Japan’s recent move to ban strategic substance exports, he said the ban will have no impact on LG Chem. LG Chem has already diversified major raw materials and substances among suppliers in Korea, China, Japan and European countries.

LG Chem will keep growing with a balanced business portfolio, not staking on one sector, he said. If LG Chem, a company with 30 trillion won in sales, will achieve a two-fold growth in five years, he said, its stakeholders will be given greater benefits.