Lotte Chemical to invest $8.9 billion in green businesses through 2030

Lotte Chemical will invest 11-trillion-won ($8.6 billion) in hydrogen energy, secondary battery material and bioplastic businesses by end of 2030, with a sizable portion being invested in the United States.

Lotte Chemical Vice Chairman Kim Gyo-hyun talks at a press conference Thursday. [YONHAP]

Lotte Chemical will invest 11-trillion-won ($8.6 billion) in hydrogen energy, secondary battery material and bioplastic businesses by end of 2030, with a sizable portion being invested in the United States.

Among the 11 trillion won, the company said 4 trillion won will be invested in its battery materials business, 6 trillion won into the hydrogen energy business and 1 trillion won into bioplastic business, at a press conference Thursday.

Some 60 percent of the 4-trillion-won battery material investment will be made in the United States.

Lotte Chemical will establish a subsidiary in the United States in the first half of the year as the Biden administration encourages battery makers to manufacture in the United States by promising extra funding. It is considering building an anode foil and electrolyte plant in the country.

“A lot of local battery makers are investing to build manufacturing plants in the United States, but there aren’t that many companies that can supply battery materials to them in large scale,” said Kim Gyo-hyun, vice chairman of Lotte Chemical. “It would be ideal to supply battery materials to them by 2024 or 2025 at the latest, and we are trying to speed up our plans."

The company said it isn't considering splitting off the battery material business at this point, and will focus on faster growth.

The company aims to produce 1.2 million tons of clean hydrogen by the end of 2030.

“The hydrogen energy business needs continuous investments, and companies like Lotte that have the capabilities to invest will be the ones succeeding in the industry,” said Hwang Jin-koo, head of Lotte Chemical’s hydrogen energy business team.

For its bioplastic business, the company plans to annually produce 70,000 tons of Bio-PET — plastic that is 30 percent made with renewable materials — by end of 2030. It produced 14,000 tons last year. Lotte Chemical also has plans to start producing other biodegradable plastics, such as polybutylene adipate terephthalate and polyhydroxyalkanoate, in the future.

The company said it has around 10 trillion won that can be used for investment based on its cash flow and will be able to carry out the total 11 trillion won investment.

Based on its investments, Lotte Chemical plans to increase its revenue.

It is targeting annual revenue of 50 trillion won in 2030. Its 2021 annual revenue was 17.8 trillion won, up 45.7 percent on year.

The advanced materials business will log annual sales of 18 trillion won in 2030, compared to 7 trillion won in 2021. Its green business, referring to hydrogen energy, secondary battery materials and bioplastic manufacturing businesses, will reach sales of 12 trillion won.

The two sectors will make up for 60 percent of the company’s revenue as it aims to switch its main focus from petrochemicals to green businesses.

Its traditional petrochemical business sales will increase to 20 trillion won in 2030 from 2021’s 11 trillion won, but will be kept under 40 percent of its total revenue.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]