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LG Chem to cut planned capex this year amid downturn

Published: 24 Mar. 2025, 16:15 Updated: 24 Mar. 2025, 17:46

LG Chem Ltd.'s Vice Chairman and CEO Shin Hak-cheol delivers an opening speech at this year's shareholders meeting at its headquarters in Yeouido, Seoul, on March 24 in this photo provided by the company. [YONHAP]

LG Chem, Korea's leading chemical firm, will reduce its planned facility investments by more than 1 trillion won ($680 million) this year due to an extended downturn in related industries, a company executive said Monday.

In its 2024 earnings conference call held last month, LG Chem said it plans to revise down its capital expenditures from the 4 trillion-won level to the 2 to 3 trillion-won range.

On Monday, LG Chem Vice Chairman and Chief Executive Officer (CEO) Shin Hak-cheol said the company will once again lower the annual spending figure from the 2.5 trillion-won to 2.7 trillion-won range by more than 1 trillion won at this year's shareholders meeting.

"The cash flow is very important" for the company at this critical juncture, Shin told reporters after the shareholders meeting.

LG Chem has been cutting costs and reorganizing the petrochemical business portfolio to ride out the market downturn.

As for the possible sale of its naphtha cracking center (NCC), the vice chairman said the company is considering a variety of options, including the sale of the NCC.

He went on to say the company is also considering selling a stake in LG Energy Solution, the country's largest battery maker, to secure capital.

LG Chem owns an 81.84 percent stake in LG Energy Solution.

For all of 2024, LG Chem's net profit plunged 74.9 percent to 515 billion won from 2.05 trillion won a year ago due to lower demand for petrochemical and battery material products.

Yonhap