05/16/2023 | Press release | Distributed by Public on 05/15/2023 23:07
■ Will expand sales portion in battery materials, sustainability business and innovative new drugs
■ Aims to accelerate in reaching net zero by 2050 by proactively building an integrated low-carbon management system
SEOUL, May 16, 2023 - LG Chem today announced its business strategy to leap up to become a top global battery materials company and its plans for its three new growth engines by 2030.
LG Chem CEO Shin Hak-cheol said in a keynote speech at the BofA 2023 Korea & Global EV/EV Battery conference held at the Grand Hyatt Seoul on May 16, that LG Chem aims to grow its battery materials sales sixfold to KRW 30 trillion (USD 25.5 billion) by 2030, from KRW 4.7 trillion (USD 3.9 billion) in 2022.
In detail, LG Chem's sales from the three sectors which the company is counting on to power its growth - battery materials, sustainability business and innovative new drugs - is expected to make up 57% of the company's total sales (by reaching KRW 40 trillion, or USD 30 billion) in 2030. The three areas accounted for 21% (with KRW 6.6 trillion, or USD 4.9 billion) of the company's sales in 2022. This will mark a turning point in LG Chem's business as it aims to become a "top global science company", shifting from a petrochemical-centric portfolio.
"Despite under an emergency management amidst the never-before pandemic and geoeconomic conflicts, LG Chem has been proactively fostering new growth powers based on global megatrends and strategies on sustainability," said Mr. Shin from LG Chem. "You will be able to see and feel LG Chem's axis moving towards the next big three engines: battery materials, sustainability businesses and innovative new drugs."
Breaking Through the Global Industry Transformation Era with Battery Materials, Sustainability Business and Innovative New Drugs
1. Battery materials: stepping up to a global leader with KRW 30 trillion (USD 25.5 billion) in sales by 2030
LG Chem plans to leap forward as the world's leading battery materials provider with KRW 30 trillion (USD 25.5 billion) in sales by 2030, backed by a compound annual growth rate of 26%. That said, LG Chem plans to cultivate its business in additional battery materials such as separators and carbon nanotubes (CNTs), in addition to the already-prominent cathode materials. LG Chem will also actively promote R&D efforts in new materials including pure silicon anode materials and solid-state battery electrolytes.
1A. Taking the lead in the cathode material sector: market, technology and metal sourcing
In particular, LG Chem is set to secure its global leadership in high-nickel cathodes around three key areas - market, technology and metal sourcing.
LG Chem plans to strengthen its market leadership by establishing a global quadrilateral production system, connecting Korea, China, U.S. and Europe, to make cathodes. This will help LG Chem expand its production capacity from 120,000 metric tons in 2023 to 470,000 metric tons by 2028. 40% of LG Chem's clients will be new global companies besides its subsidiary LG Energy Solutions,
LG Chem will also tighten its technology leadership by expanding its high-nickel cathode product lineup for pouch-type and cylindrical batteries, mass-producing ultra-high-nickel cathodes with nickel content of 95% and extending the application of single crystal cathode materials technology in the sector.
LG Chem is also actively considering expanding its offerings with cost-efficient cathode materials including high-voltage mid-nickel (Mid-Ni), lithium iron phosphate (LFP) and manganese-rich (Mn-Rich) to meet customer needs and target the growing mass market for electric vehicles (EVs).
Furthermore, LG Chem is cementing its global partnerships to secure its metal supply chain. In China, North America, Australia and Korea, LG Chem is carrying out various initiatives such as establishing joint ventures (JVs) for precursors, signing lithium contracts, and making equity investments with major players including Huayou Cobalt, Piedmont Lithium and Korea Energy Management Cooperation (KEMCO).
1B. Expanding additional battery materials business including separators
In the separator market, LG Chem plans to grow its footprint in the U.S. and European markets. To that end, LG Chem will join forces with Toray to weave its exclusive, world-class coating technology and the unique fabric technology of the Japanese materials company. LG Chem forecasts more business opportunities as separators are classified as battery components as per the U.S. Inflation Reduction Act (IRA).
LG Chem also projects to pushfully expand its business in additional battery materials such as CNTs, anode binders and cathode dispersants by seeking opportunities for partnerships based on LG Chem's technological advantages. LG Chem's CNTs, for instance, has top-notch quality as it uses cobalt-based catalysts made with LG Chem's proprietary technology which helps lowering the content of magnetic impurities that can affect battery quality.
In addition, LG Chem will actively explore growth opportunities based on innovative materials technologies such as pure-silicone (Pure-Si) anode materials, electrolytes for solid-state batteries and flame-resistant battery materials like aerogels.
2. Strengthening Sustainability Business
LG Chem aims to take the lead in the industry's low-carbon business by accelerating the transition of its business structure around recycled, bio/biodegradable and renewable energy materials. Moreover, LG Chem targets to boost sales in this sector to KRW 8 trillion (USD 6.8 billion) by 2030 from KRW 1.9 trillion (USD 1.6 billion) in 2022.
Based on its mechanical and chemical recycling technology capabilities, LG Chem is securing a diverse product portfolio to target the recycled plastics market, which is expected to reach KRW 100 trillion (USD 84 billion) by 2028.
LG Chem is leading the mechanical recycling field. For instance, LG Chem has successfully commercialized the world's first white post-consumer recycled acrylonitrile butadiene styrene (PCR ABS), overcoming the disadvantage of fading colors. LG Chem is also building a strong portfolio with various products including polycarbonates (PCs), polyethylenes (PEs), polypropylenes (PPs) and polyvinyl chlorides (PVCs) and targeting consumer markets by supplying materials to companies that make products such as eco-friendly remote controls and set-top boxes.
Chemical recycling is also an area which LG Chem is focusing on. Chemical recycling technology is, in fact, expected to be more marketable as it does not change the physical properties of the virgin material and has no limit on the number of times it can be recycled. In March, LG Chem started the construction of its first pyrolysis oil plant in Dangjin, Korea, which will be the nation's first plant using supercritical water technology and have an annual production capacity of 20,000 metric tons. In addition, LG Chem will complete building its demonstration plant for PC chemical recycling in 2026 based on its proprietary technology to secure leadership in the chemical recycling field.
The bio/biodegradable materials market is expected to grow at an annual rate of more than 20%. This can be said based on the spreading global regulations on non-biodegradable single-use plastics and increasing customer demand for biodegradable materials. Starting from the first quarter of next year, LG Chem will be mass-producing polybutylene adipate terephthalates (PBATs) - a biodegradable material which quickly decomposes in nature by reacting to oxygen and heat. To tap the market for poly lactic acids (PLAs), LG Chem is also giving shape to its collaboration with Archer-Daniels-Midland (ADM), U.S.-based multinational leader in global nutrition.
3. Innovative new drugs: becoming a pharmaceutical company with five new FDA-approved drugs and sales of KRW 2 trillion (USD 1.65 billion) by 2030
LG Chem is rolling up its sleeves to become a global innovative pharmaceutical company with five new FDA-approved drugs and sales of KRW 2 trillion (USD 1.65 billion). To that end, LG Chem will continue commercializing new drugs by concentrating on oncology and metabolic therapeutics.
In particular, the company has acquired AVEO, a U.S. company with an FDA-approved new drug FOTIVDA, to strengthen its business competitiveness in the U.S., the world's largest anti-cancer market. Moreover, the company is considering escalating the development of new oncology drugs and introducing promising new drug substances.
Accelerating to Reach Net-zero by 2050 by Proactively Establishing Low-Carbon Management
LG Chem aims to strengthen its global leadership in decarbonization and continue its sustainable growth.
LG Chem is Korea's industry-first company to establish an integrated carbon management system that enables real-time support when making financial decisions such as reviewing profits/losses and evaluating investment priorities. With this system, LG Chem can calculate the amount of carbon the company will emit based on not just primary data such as production volume and energy sources, but more overall business plans including new/expanded facilities, investment, and production plans.
Furthermore, LG Chem will establish a collaborative decarbonization model for its suppliers and proactively manage direct/indirect emissions (Scope 1 and 2) and all other indirect emissions (Scope 3).
Since declaring its commitment towards carbon-neutral growth in 2019 for the first time in Korea's chemical business, LG Chem has been a leader in the sustainability sector through various initiatives such as announcing to switch to 100% renewable energy by 2050, raising the bar for net-zero achievement, conducting environmental lifecycle assessments (LCAs) for all products, and implementing internal carbon pricing systems.
In addition, LG Chem is accelerating to include bio-based, recycled, and renewable energy materials to its business portfolio and become more low-carbon-focused. LG Chem has been steadily implementing strategies based on sustainability, such as establishing a closed-loop system for battery waste and promoting zero waste in landfill at all of its sites.
"We have been making grinding efforts to revolutionize our overall business management system - we have reformed our business portfolio, established business processes based on digital transformation (DX), and reinforced operational capabilities of our offices in four major global regions," said Mr. Shin. "We will mature our groundwork for sustainable growth and speed up our grand transition into a global science company with three core businesses: battery materials, sustainability business, and innovative new drugs."