LG Chem launches battery unit LG Energy Solution, eyes 2024 sales of $27 bn

South Korea’s LG Chem Ltd. has officially launched its battery affiliate, LG Energy Solution, to carve out a greater share of the increasingly competitive global market.

At its inaugural general and board meetings on Dec. 1, the company named Kim Jong-hyun, currently in charge of LG Chem’s battery business, as LG Energy Solution’s first chief executive.

LG Chem Vice Chairman Shin Hak-cheol was appointed as the new battery company’s chairman of the board of directors.

“We have now successfully spun off the company to reach for bigger dreams and have now set out on a great voyage,” CEO Kim said in a statement.

“The voyage is ... to become a leading eco-friendly company that provides higher value with the best technologies and quality, while innovatively improving the quality of life for humanity.”

Kim has been at the helm of LG Chem’s battery division since 2018 after joining LG Group’s healthcare unit, LG Household & Health Care, in 1984.

AIMS FOR SALES TO MORE THAN DOUBLE BY 2024

He said in his inaugural speech on Tuesday that the company aims to raise its sales revenue to 30 trillion won ($27 billion) in 2024 from an estimated 13 trillion won this year.

He also said the new company plans to increase investments in electric car batteries “at the right time” to strengthen its competitiveness.

LG Energy Solution employs about 22,000 workers, including 7,000 in Korea, and runs production plants in Korea, the US, China and Poland. Separately, the company operates R&D centers in Korea, the US, China and Germany.

IPO PLANNED TO RAISE FUNDS

LG Chem said the new company will initially be a wholly owned subsidiary, but up to 30% of its shares may be listed on the Seoul bourse or possibly in overseas markets to raise funds for investments.

Analysts said LG Chem’s battery division will be more fairly valued by the market if listed separately.

The global EV battery market has been growing rapidly amid the race for automakers to go electric and eco-friendly due to tightened environmental regulations. According to industry tracker IHS Markit, the EV market is forecast to grow at an annual average rate of 25% over the next seven years.

According to market research firm SNE Research, China’s CATL emerged as the world’s top EV battery supplier with 23.1% market share in the first nine months of the year.

LG Chem came in second with 22.9%.

Write to Man-Su Choe at bebop@hankyung.com
In-Soo Nam edited this article.