$5.2bn investment for four years Several media including TechCrunch reported that South Korea’s LG Chem would invest in $5.2bn over the next four years. The investment aims to build out […]
$5.2bn investment for four years
Several media including TechCrunch reported that South Korea’s LG Chem would invest in $5.2bn over the next four years. The investment aims to build out its battery materials business. This is because automakers and state regulators set targets to transition away from internal combustion engine vehicles. This shift can be the most transformative force in the automotive industry.
The investments will focus on boosting the production of anode materials, separation membranes, cathode binders and other essential battery components. The company also plans to build a massive cathode plant in the South Korean city of Gumi. The South Korean company will increase anode production capacity by seven-fold, from 40,000 tons to around 260,000 tons by 2026.
LG is also planning to expand its production capacity of carbon nanotubes (CNT). CNT is an advanced material used to enhance the performance of lithium-ion batteries. In fact LG Chem will produce it from 1,700 tons this year to triple or more by 2025. Thus, it will scale output at its CNT Plant 2 and commencing construction on a third CNT plant this year.
Who is LG Chem?
According to its official homepage, LG Chem will become a world-class corporation. In fact, it creates new value for their customers based on ‘science,’ beyond ‘chemistry.’
Since its establishment in 1947, LG Chem has continuously achieved growth through endless challenges and innovations. Their product range is huge. For example, they are from the durable cosmetic product lids to the top-notch batteries of unprecedented quality.
Now, LG Chem will try to be a ‘Global Top 5 Chemical Company’ with a balanced business portfolio. It has a competitive advantage, including business divisions in petrochemicals, advanced materials, life sciences, and a subsidiary specializing in batteries.
Will the competition be another level?
As most of countries across the globe declared that they would want to achieve carbon neutral by 2050. As a result, many regional or national governments have decided to ban for new sales of combustion or diesel vehicles. In addition to this, many governments give incentives to people to purchase electric vehicles. This trend means that the demand of EVs is clearly increasing. In other words, the more the demand of electric vehicles is, the more batteries are needed.
Therefore, it seems natural that the battery manufacturers including LG Chem invest more to increase their capacity. LG Chem has already made a big decision to split its battery division. Thanks to the bold decision, the division can finance more easily.
Physical products are totally different from digital products. This is because they need the investments, sometime huge investments to be produced. However, the competition in the battery market becomes intensified.
If we know there are some opportunities to earn more revenue and profit, what will we do? Of course, we will enter the game and try to win and maximize revenue and profit. Thus, the next question is how to keep or enhance the competitive advantages among leading companies? As the case of LG Chem, it would be materials since there is no battery without proper materials.