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LG Chem
Updated: Jun 5, 2020
Brief Company Profile
LG Chem was established as Lucky Chemical Industrial Co. in 1947 with a cosmetic product called Lucky Cream in Korea. Headquartered in Seoul, South Korea, it is one of the top ten chemical companies in the world today. The company got listed on Korea Stock Exchange in 1969 and operated under the original name over the years before renaming itself as LG Chem, Ltd. in 1995. It is a part of the South Korean multinational conglomerate - LG Corporation. LG Chem employs has over 36,000 employees in total.
LG Chem sites across the world
Business Segments
LG Chem has four business areas -
Petrochemicals:
This is the largest segment at LG Chem in terms of sales. The products of various processes are used in -
As basic chemicals, raw material for resins
Synthetic resins used in medical appliances, packing materials, cable insulators, solar films, and interior and exterior decoration of the the vehicles
Sash, flooring, pipes, artificial leather, cable sheath and cathode materials
Rubber, special polymers used in tires, shoes, medical gloves, golf balls etc.
Energy Solution
LG Chem produces lithium-ion batteries used in mobile devices, power tools; advanced automotive batteries including EV (electric vehicle) batteries, car batteries; battery systems for ESS (energy storage systems) for different fields including electric grid, household, commercial and UPS (uninterrupted power supply).
Advanced Materials
Different types of advanced materials produced by LG Chem are used in -
Exterior and interior decoration of the cars and engine parts
OLED, display materials, high-functional films and semiconductors
High capacity cathode material for mobile batteries, EV, ESS markets
Life Sciences
Life Sciences segment accounted for 2% of the total sales in 2019. It produces various primary, specialty drugs and aesthetic products. The drugs produced are targeted at diabetes, cardiovascular, musculoskeletal and autoimmune diseases, hepatitis B and several other fields.
Break-up of sales by segments, 2019
In addition to these segments, Farm Hannong is LG Chem's affiliate company which deals in crop protection products, fertilizers and seeds.
R&D expenditure by segments, in KRW billion
In 2019, LG Chem's R&D expenditure was KRW 1,132 billion as compared to KRW 1,062 billion in 2018, up by 6.6%. So far the company has spent KRW 266 billion in 2020.
Financial Performance
Source: LG Chem, Average exchange rate USD to KRW in 2019: 1165.2882
In terms of USD, LG Chem's revenues in 2019 clocked $ 24.5 billion.
Recent Investment Activities
In December 2019, LG Chem entered into a joint venture with General Motors to build 30 Gwh (equivalent to 500,000 EVs) plant in Ohio by 2023. It is estimated that the EV market in the US is growing at 26% to reach 1.32 million cars in 2023. Investment by LG Chem in this JV is KRW 27 trillion or $ 2.3 billion.
LG Chem acquired Uniseal, the US auto sealant maker in September 2018.
LG Chem invested USD 6 million in a battery technology company Enevate in August 2018.
Competition
The top competitors of LG Chem include BASF, SABIC and Mitsubishi Chemical Holdings.
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