LG Chem to reinforce the supply network as a new growth momentum
The management strategy of LG Chem, Ltd. in 2010 aims to hold the industry’s top position by executing “Speed Management” in order to accelerate restructuring organizational culture of the entire corporation, and enhancing the capability of the global organization. Furthermore, the company plans to pay thorough attention to maximizing the profit-making capability of the petrochemical field and strengthen its stable market position in information & electronic materials, and the battery supply globally, in order to top core business markets. In the area of petrochemicals, the company will focus on creating demand as well as balancing the gap between supply and demand by increasing its production capability and lowering costs amid gloomy expectations about market conditions and a sluggish growth outlook for 2010.
Moreover, as China and the Middle East, traditional market leaders of the global petrochemical industry, are aiming to increase their market shares by expanding global production facilities as part of a long term project, LG Chemical is drawing up plans to restrain them. In the medium and large format battery business, such as those for electric/ hybrid vehicles, robot vacuum cleaners, and TFT-LCD Glass, a high density thin film transistor glass that heat-resistance, chemical-resistance, and the qualified surface appearance are critically necessary, the company considers them as new power tools for continuous growth.
In this respect, LG Chem has announced that a manufacturing facility for the commercial production of LCD Glass is to be established in Paju following a 1.2 trillion won investment, and is scheduled to begin operations in early 2012. LCD Glass as a core element, accounting for more than 20% of the parts of LCD, was an 11 trillion-won-valued global market in 2009, and is expected to increase to as much as 17 trillion won by 2018 due to the growth tendency of the LCD market.
In addition, the No. 1 chemical company in South Korea agreed to provide lithium-ion batteries to the No. 1 automobile parts manufacturer in North America, Eaton Corporation, starting this coming November and lasting four years. In addition, the company recently reached deals to supply lithium-ion battery cells to GM’s Chevrolet Volt, and hybrid vehicles of Ford Motor Company. The battery supply contract for Eaton will begin with hybrid commercial vehicles before expanding to PHEVs (Plug-in Hybrid Electric Vehicles), which demand batteries that can be recharged by connecting to an external electric power source. These batteries call for more complex technologies in terms of capacity, power, and durability over those for normal electric cars. LG Chem plans to manufacture the battery cells at Ochang TechnoPark, an exclusive plant that produces batteries for electric cars.
Compact Power Inc., a subsidiary of LG Chem in North America, will provide the battery packs to Eaton Corporation, a supplier of the powertrain system to global commercial vehicle makers such as Navistar, Peterbilt, Kenworth, and IVECO. LG Chem is expected to quickly take a firm and stable market share after it begins to supply Eaton because Eaton has a monopoly in the North American market, boasting a market share of more than 90%.
Finally, the company aims to foster its human capital, in order to strengthen organizational power to continuously produce the fertile outcomes so that its No. 1 position will be able to maintain.