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Battery Businesses of Samsung SDI and LG Chem Growing through Competition
Vying for the Top Place
Battery Businesses of Samsung SDI and LG Chem Growing through Competition
  • By Jung Min-hee
  • December 21, 2018, 09:47
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Samsung SDI and LG Chem have vied for the top place in the battery business with each other for years.

Samsung SDI is expected to become the largest battery manufacturer in South Korea in terms of sales this year by beating LG Chem. Samsung SDI’s battery sales for this year are estimated to exceed 7 trillion won (US$6.3 billion), while LG Chem’s battery sales are projected to reach 6.4 trillion won (US$5.7 billion) or so.

The two companies have vied for the top place for years. Samsung SDI took the top spot in 2014 and 2015 and LG Chem did so in 2016 and 2017. Both companies’ battery sales more than doubled through the competition. The sales of each are forecast to reach more than 10 trillion won (US$9 billion) next year.

Samsung SDI’s battery sales totaled 5.07 trillion won (US$4.5 billion) for the first three quarters of this year whereas last year’s total was 4.3 trillion won (3.8 billion). The outlook for the fourth quarter is even rosier with polymer batteries and ESS batteries showing a satisfactory performance. In addition, Samsung SDI recently signed a cylindrical battery supply contract with Jaguar. It is already supplying batteries to BMW and its EV battery sales are likely to continue to increase.

LG Chem’s battery sales added up to 4.44 trillion won (US$4.0 billion) during the same period. In the fourth quarter, its automotive and overall battery sales are estimated to reach 1 trillion won and 2 trillion won, respectively. In addition, this quarter is expected to become the first black-ink period for LG Chem’s automotive battery business unit.

Last year, the business unit’s annual operating loss amounted to 114 billion won (US$102 million). This year, however, the loss is estimated to fall to 56 billion won (US$50 million). The business unit’s net operating profit for next year is estimated at 196 billion won (US$176 million).

These days, both companies are increasing their overseas investments to better respond to increasing demands. For example, Samsung SDI is expanding its battery manufacturing facilities in Xian and Tianjin, China by investing more than 1.3 trillion won (US$1.2 billion). Samsung SDI built its Tianjin plant in 1996 to produce small batteries. Scheduled to be completed early next year, the three new production lines in Tianjin are under construction at an investment of 400 billion won (US$360 million) at a 100,000 square meter site near the existing plant.

LG Chem is increasing its production capacity about 20% faster than previously planned with the number of received orders on the rise. On Nov. 29, the company decided to invest 651.3 billion won (US$586 million)in LG Chem Wroclaw Energy, its fully-owned subsidiary in Poland, to increase its automotive battery production capacity. LG Chem’s EV battery and ESS battery sales are expected to rise 60% and double year on year in 2019, respectively.