CEO says company will seek to supply electric-car batteries to Japanese firms
OCHANG, North Chungcheong Province ― LG Chem, the nation’s largest chemical company, sees South Korea having a global edge as a supplier of lithium batteries for electric vehicles, including in markets such as Japan.
Renewing the firm’s pledge to join hands with international carmakers to lead the world’s battery industry, the firm’s chief executive Kim Bahn-suk said it expected more tie-ups, this time with automakers in Japan.
“Japan is behind us in (lithium batteries), so we expect more demand from Japanese carmakers that will lead to contracts,” Kim said in a press briefing on the sidelines of a ceremony held here to mark the completion of LG Chem’s electric-car battery plant.
LG Chem has so far secured 10 global and local automakers as clients, including General Motors, Hyundai Motor, Renault, Renault Samsung and Ford.
As the world’s largest operation of its kind, the plant will possess an annual battery production capacity of up to 100,000 cars, LG Chem said.
Kim also noted that the competition to develop upgraded batteries has already commenced in the face of increasing demand to wean the economy off of fossil fuels.
“The second generation of lithium batteries that are more durable and 30-40 percent more cost-efficient will start being rolled out in 2013 and 2015,” he said.
LG Chem will be investing some 2 trillion won ($1.8 billion) to aim for sales of 4 trillion won by 2015.
With the addition of the two additional plants it is building ― one in Korea and one in the U.S.― LG Chem will become capable of producing enough batteries to supply up to 350,000 cars a year, starting in 2013.
Kim said a third battery plant in Korea will be completed by 2013.
Based on these plans, LG Chem has pledged to secure one quarter of the world’s electric car battery market by 2015 and sales of 4 trillion won to solidify its position as the world’s top producer.
LG Chem employees examine products at the firm’s electric car battery plant at Ochang, North Chungcheong Province. (LG Chem)
President Lee Myung-bak, in a congratulatory message to LG Chem, commended the firm for leading the way in electric-car batteries, a step that he believes to be necessary in fostering eco-friendly development.
“At the moment, electric-cars seem to be a matter of choice, but they will soon become the road that we all must head toward,” Lee said, underscoring that Korea is taking the initiative to help reduce green house gas.
LG Chem first jumped into the electric car battery market in 2000.
In just four years, the company attained a $4.6 million contract for developing batteries for hybrid cars from a consortium formed by the U.S. Department of Energy and three international carmakers.
Last year, LG Chem posted a record amount of sales and operating profit, with sales rising over 25 percent to 19.4 trillion won.
The global electric car market was expected to further grow on the increasing demand for eco-friendly cars.
The market is now expected to reach 5.8 million cars a year by 2015, up from the current 1.6 million.
The market for lithium batteries used in electric vehicles will consequently grow to be worth about 8 trillion won by 2013, and further to 16 trillion won by 2015.
General Motors’ vice chairman Stephen Girsky and Renault Samsung CEO Jean-Marie Hurtiger were among the executives of major automakers who attended the Wednesday ceremony.
LG Chem on the day closed at 477,500 won, up 1.9 percent from Tuesday.
By Kim Ji-hyun (email@example.com