Get Ready Beforehand
LG Chem is extending its battery plant in Nanjing, China. It shows the company’s will to expand investment in its production facilities in China despite China’s checks on Korean battery manufacturers.
According to industry sources on Feb. 14, LG Chem has recently decided to build two additional plants for automotive batteries and small batteries at the Nanjing battery factory and it is choosing a constructor. Although the specifics, such as the size of plants and the amount of investments, is undisclosed, the construction cost of the two plants alone is estimated at US$35 million (39.83 billion won).
LG Chem decided to construct an EV battery plant in Nanjing in 2014, and completed the construction of a three-story, 25,000-square-meter plant, bigger than three soccer stadiums, the next year in Oct. 2015. As the factory can produce enough batteries for 50,000 battery-electric cars, which can run more than 320 kilometers per hour, and for 180,000 plugin-hybrid electric cars per year, it serves as the outpost for the Chinese market invasion.
LG Chem is extending the plant, but the company is not expected to build additional battery production lines right away. An official from LG Chem said, “Nothing is confirmed yet on the extension of lines.”
In this regard, industry sources say that LG Chem is making an up-front investment to prepare for rapidly changing market conditions, though the company is now struggling with the Chinese government’s checks on Korean battery makers. An official from the industry said, “Currently, China has adopted a containment policy towards Korean battery producers due to the deployment of the THAAD system in Korea. So, it is not easy to decide on additional investment. However, the company seems to get ready beforehand since the political situation can rapidly change anytime.”