LG Chem to form separator JV with Japan’s Toray

LG Chem Ltd., South Korea’s top chemical maker, and Japan’s Toray Industries Inc. will set up a joint venture (JV) for separators, core materials for secondary batteries.

The move is a part of LG Chem’s plan to invest 10 trillion won ($8.7 billion) in battery material, renewable and bio sectors through 2025 announced earlier.

LG Chem was set to build a plant in Europe with Toray, the world’s third-largest wet separator maker, according to the investment banking industry on July 15. The both companies were known to have agreed on the JV, although they are still discussing details such as investment size, stake ratio and production scale.

“LG Chem is working with Toray to establish an overseas plant in order to meet carbon neutral regulations of developed countries such as Europe and the United States,” said a private equity fund official said. “They agreed to set up a wet separator factory in Eastern Europe in principle.”

Through the partnership with Toray, LG Chem will be able to secure a stable separator supplier to its subsidiary LG Energy Solution Ltd. LG Chem also plans to seek new business in battery material markets. A separator is one of four core materials for secondary batteries along with cathode materials, anode materials and electrolytes.

In 2015, LG Chem withdrew from the separator business by selling its domestic facilities to Toray as the marker size was small and the competitiveness of its own manufacturing was weak at that time. But the company is seeking the business again as demand for battery materials is expected to surge on the fast-growing electric vehicle (EV) markets.

LG Chem was known to hold a board meeting on July 29 to approve a plan to take over LG Electronics Inc.’s separator business. That will allow the JV to apply LG Electronics’ coating technology to Toray’s separator films. Coating technology improves separator’s stability.

An LG Chem official said the company is considering various measures to enhance business competitiveness but it has not decided anything yet.

Write to Ji-Hye Min at spop@hankyung.com
Jongwoo Cheon edited this article.