KRW48tn Set Aside for R&D
LG Group will invest a total of 106 trillion won in Korea by 2026 to strengthen its capabilities in future growth areas, including batteries, next-generation displays and biotechnology. It aims to build a high-tech, high-value-added production and R&D core base in Korea.
The group announced a mid- to long-term domestic investment and recruitment plan on May 26. It said that even when overseas investment is increased to respond to changes in global value chains (GVCs) in the future, a significant proportion of the investment will be made in Korea to maintain the domestic high-tech, high-value-added core base.
LG's investment will focus on the expansion of high-tech, high-value-added production facilities and the establishment of infrastructure. In particular, it plans to invest 48 trillion won, or 45.3 percent of the total amount, in R&D to boost its competitiveness in cutting-edge future growth areas.
About 40 percent of the total investment, or 43 trillion won, will be invested in future growth areas, including batteries, battery materials, electric fields, next-generation displays, artificial intelligence (AI), data, and eco-friendly clean tech.
In the existing core businesses such as smart home appliances, TVs, chemicals, information technology (IT) and telecommunications, it plans to maintain its dominance in the global market through continuous and bold investments.
Batteries and battery materials will receive the largest amount of the investment. LG will invest more than 10 trillion won in the battery field over the next five years to sharpen its global competitiveness. In addition, it will promote new businesses such as the development of next-generation batteries, the establishment of a virtuous resource cycle system and the Battery as a Service (BaaS) platform business.
LG Chem plans to invest 1.7 trillion won in battery materials by 2026 to grow into the world’s No. 1 battery materials company. Currently, a cathode material plant is under construction in Gumi of North Gyeongsang Province. The company is also considering making merger and acquisition (M&A) deals and establishing joint ventures (JVs) with companies with technology and marketability.
In other key future businesses, AI and data, LG plans to invest 3.6 trillion won to secure technology at the highest level. In 2020, the group plans to focus on related R&D such as giant AI “EXAONE,” centering on the LG AI Research Center established as the group’s AI research hub.
In the biotech field, more than 1.5 trillion won will be invested in the development of innovative new drugs. LG Chem decided to develop innovative new drugs such as cell therapies and expand its new drug pipelines in their clinical development stages. In addition to promoting M&A and JV deals, it will focus on securing next-generation advanced biotechnology by nurturing convergence talent.
Moreover, LG plans to invest 1.8 trillion won over five years in eco-friendly technology fields such as biodegradable plastics and new and renewable energy industrial materials. LG Chem is ramping up investment in the growing eco-friendly plastics market, such as biodegradable polymer plastics, while exploring new business opportunities such as reinforcing waste plastic recycling.