LG Chem breaks ground for car battery plant

LG Chem, the biggest chemicals maker in the county, broke ground for the construction of a 1 trillion won ($794.4 million) electric-car battery plant in the Ochang Techno Park in Cheongwon, North Chungcheong Province, yesterday.

The new plant, scheduled be opened in the first half of next year, will supply lithium-ion batteries to General Motors from the second half of next year.



"We are running out of fossil fuels, and global warming makes the development of eco-friendly energy sources a key issue for survival," LG Chem CEO Kim Bahn-suk said in the groundbreaking ceremony. "The high performance, high efficient electric car batteries produced here will be a key ingredient for the futuristic and environmentally-friendly car technologies," he said.

In January, the U.S. automaker picked LG Chem to produce batteries for the Chevrolet Volt plug-in electric car. Recently, GM reaffirmed that it would stick to its original production schedule for Volt, although it filed for bankrupcy protection in the United States.

LG Chem has started production of hybrid-car batteries at another battery plant in Ochang. The batteries will be used for Hyundai Motor`s LPI Hybrid Avante and Kia Motors` LPG hybrid Forte, which are scheduled to be unveiled in July and September, respectively.

Participants in yesterday`s groundbreaking ceremony included Minister of Knowledge Economy Lee Youn-ho, LG Group chairman Koo Bon-moo and North Chungcheong Province Governor Chung Woo-taek. Other top LG Group executives included LG Corp. Vice Chairman Kang Yu-sik, LG Electronics` chief executive Nam Yong and LG International Corp. vice chairman and CEO Koo Bon-joon.

Yang Woong-chul, president of Hyundai Motor`s auto research & development division and Robert Kruse, GM`s executive director of global vehicle engineering for hybrids, also attended the ceremony.

"The government aims to grow Korean green car industry to be one of the world`s `big four` by the mid 2010s, and I believe LG Chem will be a valuable partner for us," Minister Lee said. "The future of the electronic car battery will also decide the future of not only the global auto industry but also the energy industry in a larger sense," he said.

LG Chem officials said global demand for electric vehicles will increase to 3.3 million by 2013 and 4.6 million by 2015. Annual revenue from the battery business is expected to top 2 trillion won by 2015.

In an effort to to ensure stable supply to GM, LG Chem is considering building a battery plant in the United States, although a detailed schedule has not been decided yet, the company said yesterday.

(danlee@heraldm.com)





By Lee Yong-sung