LG Chem to invest $1B in two China battery plantsLG Chem will invest 1.2 trillion won ($1.07 billion) in its battery manufacturing facilities in China to meet rapidly growing global demand.
The company, which made the announcement Thursday, said it will expand two of its existing battery plants in Nanjing, China, by 2020.
Half of the investment amount will be committed to its electric car battery factory, while another 600 billion won will be invested in the other factory that produces small-sized cylindrical batteries used in IT devices and light electric vehicles.
The battery maker’s efforts to expand manufacturing capacity comes amid rising demand.
According to data provider B3, global demand for cylindrical batteries will reach six billion units in 2019 from 2.3 billion units in 2015.
Reports of a Chinese government plan to abolish subsidies for electric cars in 2020 may have contributed to LG Chem’s push into China.
The government subsidies were directed towards vehicles with Chinese-made batteries. Once they are ended, the playing field will be leveled.
In addition to the company’s two plants in Nanjing, a new factory to produce electric vehicle batteries is under construction. The facility is scheduled to be completed by the end of 2019.
The company marked the investment plan by holding a ceremony in Nanjing on Wednesday. It was attended by Kim Jong-hyun, head of LG Chem’s battery division, and Nanjing Mayor Lan Shaomin.
“We will develop the three battery factories in Nanjing as the export base for Asia and the world,” said Kim at the event.
LG Chem ranked fourth in the global electric car batteries market through November last year, holding an 8 percent share, according to market researcher SNE Research.
BY CHAE YUN-HWAN [email@example.com]