LG Chem adds battery separator biz in JV with Toray in Hungary

[Photo provided by LG Chem Ltd.]

South Korean chemical manufacturer LG Chem Ltd. is returning to battery separator business it withdrew six years ago through near $1 billion manufacturing project in Hungary in a joint venture with Toray Industries of Japan.

LG Chem said on Wednesday that it will set up a 50:50 joint venture dedicated to secondary battery separator with Toray in Hungary to target Europe’s battery separator market. A virtual contract was signed between LG Chem CEO Shin Hak-cheol and Toray CEO Akihiro Nikkaku.

LG Chem will come up with the funding while Toray provides the manufacturing site. LG Chem will buy an additional 20 percent stake from Toray after 30 months to command management control. It will invest over 1 trillion won ($853 billion) in the joint entity in stages, including initial 642.7 billion won.

The joint plant will be built on 420,000 square meter space in the Toray Industries Hungary Kft plant in Nyergesugfalu in Komarom-Esztergom province in northwestern Hungary.

The two companies plan to add lines in the first half of next year to raise output to more than 800 million square meters by 2028, or the world’s five largest capacity.

Separators produced from the plant will be supplied to European battery companies including LG Energy Solution Poland in Wroclaw, Poland.

Through the joint venture, Toray attains stable customer base in Europe, including LG Energy Solution in Poland, while LG Chem gains upper hand in separator market with Toray’s technology on top of its coating skills.

In July, LG Chem unveiled the goal of becoming world’s top comprehensive battery company by providing all-round battery materials including for cathodes, anodes, electrolyte additives, and carbon nanotube, and separators.

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