LG Chem sets 7 trillion won goal

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LG Chem sets 7 trillion won goal

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LG Chem, the nation’s largest chemical company, aims to become the top provider of electric-car batteries in the global market and achieve 7 trillion won ($6.4 billion) in sales in 2020, the company said Sunday.

Considering LG Chem’s projected battery sales for this year is about 1.2 trillion won, it is attempting nearly six times growth in four years.

Major grounds to such ambition include expectations on battery market expansion as the second-generation of electric vehicles (EVs), which can travel more than 300 kilometers (186 miles) on a single charge, are to be released from the end of this year. Also, the company plans to add another battery manufacturing facility in Poland to effectively handle increased business in Europe.

The battery maker says it secured 36 trillion won worth of orders from 82 projects with 28 global automakers and 30 trillion won worth of orders are catered to providing batteries for second-generation EVs. Hyundai Motor, Kia Motors, GM, Ford, Audi and Daimler are among its business partners. While 2 trillion won in orders has been completed as of 2015, 34 trillion won worth remain to be completed.

“Based on our know-how built while supplying batteries to over 500,000 EVs, our competitiveness in performance, safety and pricing has been approved globally,” the company said in a statement.

The company’s next focus in R&D is to develop batteries that could power EVs for twice the distance while recharging in a shorter period, less than 20 minutes. The preparation is for third-generation EVs in development by major automakers, which can travel over 500 kilometers per charge.

LG Chem also wants to bolster global battery production and distribution, with plans to break ground for a battery factory in Wroclaw, Poland within the year. The new factory would mark the fourth after the Ochang plant in Korea, the Michigan plant in the U.S. and the Nanjing plant in China.

“Roughly 90 percent of the pure EVs are sold in the U.S., China and Europe,” a company spokesperson said. “The company will take an advantageous position to predominate global demand by building up plants in all three regions.”

The European pure EV market, which the plant in Poland will serve, is expected to grow rapidly, from selling roughly 110,000 cars at present to about 2.77 million cars by 2030, the company said.

BofA Merrill Lynch Global Research estimates that the world’s EV market will grow from $11 billion in 2015 to $32 billion by 2020.

“The battery market is at the verge of rapid growth and by 2018 we will secure No.1 rankings in technology, revenue and profitability,” said Lee Woong-beom, president of LG Chem’s battery business division.


BY KIM JEE-HEE [kim.jeehee@joongang.co.kr]

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