Korea’s LX Group seeks growth from green technologies

LX Group logo [Courtesy of LX Group]

LX Group, which enters the third year of business in May after separating from South Korea’s LG Group in 2021, plans to expand its presence in the environmentally-friendly sector, such as battery materials for electric vehicles, pharmaceutical and healthcare, power chips, and reusable materials.

“We will take a leap for the ‘next jump’ with new growth wings,” said an unnamed official from LX Group.

The conglomerate is expected to be designated as one of the large business groups in Korea with assets worth more than 10 trillion won ($7.6 billion) by the Fair Trade Commission next month. LX Group had assets worth 11 trillion won as of April and will likely be put in the top 40 ranks.

LX Group units, including LX International Corp., LX Hausys Ltd., and LX Semicon Co. will seek to expand their business portfolios into environmentally-friendly technologies.

Over the past two years, LX Group Chairman Koo Bon-joon has led the conglomerate to grow based on merger and acquisitions and subsidiary establishment. Industry insiders note that Koo will continue to seek the strategy for expansion.

In April last year, Koo had carried out efforts to acquire U.S. Magnachip Semiconductor but they fell through. This time, Koo is known to be interested in taking over the country’s largest shipping company HMM Co. to secure a growth engine. The potential takeover is expected to create synergy with LX Group, which has LX International, a trading subsidiary, and LX Pantos Co., a logistics unit of LX International.

Industry insiders note that LX Pantos may opt for a listing on the stock market in a move to secure funds for the acquisition.

LX Group Chairman Koo Bon-joon [Photo provided by LX Group]

Market insiders also focus on how Chairman Koo appointed his eldest son Koo Hyung-mo as the chief executive officer of LX MDI, an affiliate of LX Holdings Corp., which suggests that he laid the foundation for a succession. LX MDI, known to serve as a think tank for LX Group, is responsible for the prevention and control of risks in business operations.

LX International is mulling investments in several nickel mines located in Indonesia as part of its effort to obtain strategic minerals. As demand for nickel refining work and battery precursor production will likely rise due to the U.S. Inflation Reduction Act, the Korean company seeks to use the emerging demand as a business opportunity.

LX International is also seeking to make further investments in renewable energy at home and abroad. In addition to the acquisition of Poseung Green Power Co., the operator of a biomass power plant, in October last year, the company in January also acquired Hankuk Glass Industries Inc., the country‘s leading glass manufacturing company, to ensure stable profit.

LX Group posted 25.3 trillion won in sales and 1.4 trillion won in operating profit last year, up 57.7 percent and 234.3 percent, respectively, compared with 2020 figures before the spin off.

Market insiders note that LX International’s takeover of Hankuk Glass Industries played a decisive role in raising LX Group‘s assets to over 11 trillion won from 8.09 trillion won before the spin-off.