Dignitaries, including President Moon Jae-in, Gyeongsangbuk-do Gov. Lee Cheol-woo, Gumi Mayor Jang Se-yong, and LG Chem Vice Chairman Shin Hak-cheol, pose side by side at a ceremony to sign a contract on the Gumi-style regional job creation model at the Gumi Convention Center on July 29. (Photo: LG Chem)

A Gumi-style regional job creation model based on collaboration for shared growth among labor, management and government was launched. Under the project, LG Chem will build a value-added product plant and the Gumi Municipal Government will provide administrative and financial support.

President Moon Jae-in, Deputy Prime Minister-Minister of Economy and Finance Hong Nam-ki, Minister of Trade, Industry and Energy Sung Yun-mo, Gyeongsangbuk-do Gov. Lee Cheol-woo, Gumi Mayor Jang Se-yong, and LG Chem Vice Chairman Shin Hak-cheol participated in a ceremony to sign a contract on investments at the Gumi Convention Center on July 29.

Under the deal, LG Chem will build a cathode materials plant at the Gumi National Industrial Complex by investing 500 billion won between 2020 and 2024 while the Gyeongsangbuk-do provincial and Gumi municipal governments will offer relate administrative and financial support.

Cathode materials are one of the four key raw materials for producing batteries along with anode materials, electrolytes and separators. They take on significance, accounting for 40 percent of the raw material costs for producing batteries.

The cathode material plant, scheduled to be dedicated in 2024, will have a capacity of producing 60,000 tons annually, equivalent to those used for producing about 500,000 high-performance EV battery units.

LG Chem Vice Chairman Shin said, “This investment in Gumi will serve as an opportunity to enhance the global competitiveness of the battery business, and if investments are completed, 70 percent of cathode materials production will be done in Korea.”

LG Chem will devote itself to reinvigorating the regional economy, creating jobs and building foundation for shared growth with the regional society, he added.

The project is expected to have direct and indirect impacts of creating about 1,000 quality jobs. The Gwangju-style job creation model will offer half of the average wages of Korean automakers, whereas the Gumi-style job creation model will provide wage similar to current levels of LG Chem officials.

The signing of the investment contract comes as LG Chem, seeking the expansion of cathode materials production on the strength of the surging EV battery market, is on the same wavelength with the Gumi municipal government, desperate to attract companies.

 
The value of LG Chem’s backlog orders surpassed 110 trillion won as of the end of March. As backlog orders are showing signs of surging, LG Chem’s energy solutions business is predicted to see sales jump 6.5 trillion won last year to 31.6 trillion won in 2024.

 
The reason is that on the top of the construction of the new plant in Gumi, LG Chem has decided to redouble the capacity of the current plant in Cheongju, Chungcheongbuk-do, to 50,000 tons.

President Moon said the government, recognizing the significance of creating a new type of job creation model for shared growth, will provide full support to spread it. LG Chem will be in charge of full investment in the Gumi-style job creation model unlike the Gwangju-style one.