LG Chem hopes to double revenue by 2030
Published: 08 Feb. 2022, 18:34
LG Chem aims to double its revenue by 2030, and generate half of it from three new business areas — battery materials, eco-friendly materials and biopharmaceuticals.
These were just a few goals CEO Shin Hak-cheol revealed during a live-streamed session for the company's 2021 earnings report and future business plans held Tuesday.
LG Chem reported 3.96 trillion won ($3.3 billion) in net profit in 2021, a 480 percent jump from a year earlier but less than market consensus of 4.06 trillion won.
Its revenues came in at 42.7 trillion won, a 42 percent year-on-year increase, while operating profit increased 178.4 percent on year to 5.03 trillion won.
Despite the strong earnings, the company's shares have declined in recent months, mainly due to investors discontent about the listing of LG Energy Solution.
LG Chem, which rose as high as 1.05 million won on Jan. 14, closed at 617,000 won on Tuesday, down 41 percent. It fell 3.4 percent Tuesday alone. The company is now left with three divisions: petrochemicals, life sciences and advanced materials.
The chemical company said it aims to generate 60 trillion won of revenue in 2030, up around 130 percent from the 2021 figure. Of the 60 trillion won, half will come from eco-friendly materials, battery materials and biopharmaceuticals.
It said it will spend 1 trillion won on research and development and hire 500 employees this year alone.
"LG Chem's annual revenues grew more than 10-fold over the past 20 years as we successfully diversified our business portfolio along with the industry trends," Shin said during the event. "This moment, when the industry is faced with a big shift due to the climate crisis, digital transformation and the pandemic, will be a great opportunity for LG Chem to grow as the top global science company."
One of the biggest focuses will be on the battery materials business, such as cathode and separators, that are key components in electric vehicle (EV) batteries, it said.
The business generated 1.7 trillion won of revenue in 2021, and the company will take it to 21 trillion won, over a 12-fold increase.
The company is currently building a cathode production facility in Gumi, North Gyeongsang, which will have an annual capacity of 60,000 tons. It plans to expand the capacity to 260,000 tons through 2026.
LG Chem is strengthening its capacity for the processing of plastic waste, and increasing it biodegradable materials and renewable energy production.
In order to collect as much as plastic waste as possible, LG Chem said it will work with many other firms such, as Coupang and LG Electronics.
It plans to build a poly lactic acid (PLA) factory in the United States, which will have an annual capacity of 75,000 tons.
PLA is biodegradable plastic that can be produced from renewable resources. Its raw material, lactic acid, is derived from corn starch through fermentation. The 100 percent bio-based plastic can be used to make food containers or tableware and takes a few months to naturally decompose.
LG Chem in September signed an agreement with Chicago-based Archer Daniels Midland for building the factory, with the goal of finishing the construction in 2025.
A poly butylene adipate-co-terephthalate (PBAT) factory is also being built at the Daesan Complex in Seosan, South Chungcheong, with the goal of starting operation in 2024. PBAT is a fully biodegradable polymer that leaves no toxic residues when buried in soil. It is often used in packaging or for film used for farming.
The company generated around 1.4 trillion won from the eco-friendly material business and hopes to increase that to 8 trillion won in 2030.
Biopharmaceuticals is another area on which LG Chem has been concentrating.
LG Chem currently has 10 candidates that are undergoing at least Phase 1 clinical trials. Tigulixostat, a gout treatment candidate, successfully finished the Phase 2 clinical trials last year and is set to start the last round of trials in the United States and China.
Its non-alcoholic steatohepatitis treatment, referred to as LR20056, is currently in Phase 1 clinical trials in the United States. The company aims to complete it and start the Phase 2 trials this year.
"LG Chem's core businesses will be shifted to battery materials, eco-friendly materials and biopharmaceuticals by 2030," Shin added. "Whatever the situation, we will keep our way for growth."
BY SARAH CHEA [[email protected]]
with the Korea JoongAng Daily
To write comments, please log in to one of the accounts.
Standards Board Policy (0/250자)