LG Chem to sextuple battery materials revenue by 2030

LG Chem aims to up its battery material business revenue by six-fold by 2030, with a goal of transforming itself into a comprehensive materials company.

LG Chem CEO Shin Hak-cheol speaks during a conference at the Grand Hyatt Seoul in central Seoul on Tuesday. [LG CHEM]

LG Chem aims to up its battery materials business revenue six-fold by 2030, with a goal of transforming itself into a comprehensive materials company.

The Korean company generated around 4.7 trillion won ($3.5 billion) from its battery materials business, including cathode materials, in 2022. That will be increased to 30 trillion won by the end of 2030.

The strategic business plan was announced by LG Chem CEO Shin Hak-cheol at a conference hosted by Bank of America in Seoul on Tuesday.

"With that, the three new business areas — battery materials, eco-friendly materials and biopharmaceuticals — will take up 57 percent of our overall annual value in 2030, which currently accounts for 21 percent," Shin said during the conference.

LG Chem plans to expand its cathode production capacity, which stands at around 120,000 tons as of 2023, to 470,000 tons by 2028. Cathodes are one of the critical ingredients in making batteries, taking up 40 percent of the battery cost.

Shin added that he is also reviewing a plan to diversify its cathode product portfolio, including LFP, or lithium iron phosphate, batteries, and “high-manganese batteries,” which are made with about 70 percent less nickel and cobalt, the two most expensive raw materials.

The company hopes to attract 40 percent of its clients from foreign countries.

Its revenue from eco-friendly materials business will be increased to 8 trillion won by 2030 from the current 1.9 trillion won.

LG Chem recently broke ground for its 310-billion-won plastic recycling plant in Dangjin, South Chungcheong. The plastic recycling facility will produce 20,000 tons of pyrolysis oil per year if completed. Commercial operations are scheduled to begin next year.

The pyrolysis oil extracted from plastic waste will be used as feedstock for petrochemical products such as synthetic resin, according to LG Chem.

Pyrolysis oil has been mostly used as fuel, instead of petrochemical feedstock, due to impurities.

LG Chem hopes to generate around 2-trillion-won of revenue in its biopharmaceutical business with five U.S. Food and Drug Administration-approved drug lineups.

It recently acquired Boston-based AVEO Pharmaceuticals, which developed Fotivda, a treatment for kidney cancer that acquired use approval from the FDA in 2021. LG Chem has 20 drugs that are in preclinical trials or clinical trials. Of them, nine are cancer treatments.

BY SARAH CHEA [chea.sarah@joongang.co.kr]