For those that are not familiar with LG Chem and its growing footprint in the U.S. battery industry, what would you like them to know?
LG Chem is the parent company of LG Energy Solution, a spun-off battery company in which we still maintain 82% ownership. LG Chem consists of three main business segments: petrochemical, advanced materials, and bioscience/pharmaceutical. We consider ourselves a material science company, critical for enabling technologies like batteries, displays, and semiconductors. Our advanced materials group, especially the battery materials business, is growing rapidly. This includes designing and producing critical battery components like cathodes and separators. Despite a perceived slowdown in growth, the battery market is still expanding at an impressive 18-20%.
We also have a significant bioscience and pharmaceutical business, being one of the largest biopharmaceutical companies in Korea. We are expanding into the U.S. market with oncology solutions and cancer-fighting drugs. LG Chem is a fully integrated pharmaceutical company, handling everything from molecule design to clinical trials and commercialization.
How does LG Chem manage to be an expert in biopharmaceuticals, petrochemicals and battery materials, which are very different fields?
There is significant technical synergy between our petrochemical and advanced materials businesses. Many of our advanced materials technologies are based on our petrochemical expertise, particularly in catalyst and polymerization.
Pharmaceuticals, while different, has been part of our business for many years. We have long-standing expertise in developing molecules and producing biosimilar products. Though it is a smaller part of our business, being part of a large corporation allows us to fund and develop promising pharmaceutical projects that require substantial investment and time. We leverage shared business processes, capital deployment, and back-office efficiencies across all our businesses to create synergies. This approach helps us prioritize programs and manage resources effectively. We do not operate as a holding company but as a cohesive entity where different segments support and enhance each other.
Given your location at the doorstep of APAC, what benefits and opportunities does this offer, considering the complexities from a geopolitical angle?
From a geographic perspective, being headquartered in Korea is advantageous for LG Chem. Most of our R&D and significant manufacturing are done here. This places us strategically in the fastest-growing economies of the Asia-Pacific region, including South Asia, India, and China. We have a substantial footprint in China with more than 10 plants, including battery, cathode, and petrochemical facilities. This existing base allows us to capitalize on future opportunities, despite the fluctuating regulatory environment.
Our significant investments in China position us well in a market that remains crucial for automotive, batteries, petrochemicals, and biopharmaceuticals. While current demand may not fully utilize our capacity, we can continue developing new applications and market segments. We navigate the geopolitical landscape by leveraging our established presence and fostering mutually beneficial relationships. By staying adaptable and proactive, we aim to thrive in this complex and dynamic environment.
What do you think is the greatest challenge facing LG Chem right now as you expand and try to prosper in this chaotic environment?
The greatest challenge for LG Chem, like any global company, is staying ahead of mega trends and technological advancements. Whether it's AI, EV penetration, or geopolitical shifts like the lithium price, war in Ukraine, we must remain knowledgeable and adaptable. Predicting technological advancements and understanding market needs are crucial for staying ahead. This involves continuous engagement with customers, understanding their current and future requirements, and keeping abreast of market and geographical dynamics.
What makes me anxious is ensuring that we stay ahead of these trends and not fall behind. We need to stay ahead of mega trends, technological advancements, and market dynamics. While we are well aware of our competition and current standings, we can always improve. Our focus is on maintaining our competitive edge through intelligence, market knowledge, and proactive engagement with the latest technologies and trends.
What makes your technology in the battery materials and battery science division stand out from the competition?
LG Chem has the longest history in the battery business, having started over 25 years ago. We were pioneers in mass-producing PHEV batteries. This extensive history has allowed us to accumulate a wealth of intellectual property and breakthrough technologies. Our technological depth and continuous innovation provide a clear differentiation from our competitors.
Additionally, our deep understanding of markets and customers sets us apart. We have worked with nearly every major OEM globally, including early engagements with Chinese companies. This long-standing interaction has given us valuable insights into the electrification needs of various OEMs. Our comprehensive market knowledge and customer relationships enable us to anticipate future trends and needs, keeping us at the forefront of the industry.
With large contracts and positive cash flow, LG Chem is ahead of the competition. What are you excited about in terms of taking risks and exploring new opportunities?
We focus on Horizon three programs, which are technologies expected to materialize in seven to ten years. These programs are deeply connected to our core business and vision. For example, we are working on post-lithium ion chemistry and CO2 conversion technologies. These long-term projects address future industry needs and environmental challenges, like capturing and converting CO2 into useful materials.
Our long-term programs, such as cell therapy and biopharmaceutical advancements, are grounded in our industry understanding and future vision. These initiatives are not moonshots but are strategically aligned with our existing business strengths and future market needs. Our scientists are excited about these projects, ensuring we invest in both short-term and long-term technologies. This balanced approach helps guarantee that we remain competitive and innovative in the evolving industry landscape.
