LG Chem Will Invest KRW 1.2 Trillion to Expand Its Battery Plants in Nanjing
South Korea’s LG Chem announced on January 9 that it will invest KRW 1.2 trillion (USD 1.07 billion) to expand its two battery production plants located in the Chinese city of Nanjing. The initiation of this capacity expansion program is in response to the rising demand in China for powertrain batteries used in electric vehicles (EVs) and cylindrical batteries used in various electronic products.
The Korea Herald, an English-language newspaper published in Seoul, reported in its coverage of the announcement that LG Chem has divided the investment into two parts. Around KRW 600 billion will be spent on raising the production of EV batteries. The remaining amount will be used to raise the production of cylindrical batteries for digital devices and other applications, including electric bicycles, electric scooters, and wireless vacuum cleaners.
B3 Intelligence, a research firm cited by LG Chem in its announcement, forecasts that the global demand for cylindrical batteries will total around 6 billion units this year. This quantity is 2.6 times of that for 2015 and translates to an average annual increase of 27% in the global demand during the 2015-2019 period. LG Chem stated that the expansion of the Nanjing base will enhance its position in China’s newly emerged and rapidly growing battery market.
Business Korea, another Korean media outlet, reported last December that South Korea’s battery suppliers will soon be able to compete on a better footing in China as the country begins phasing out subsidies for domestic battery manufacturers. With better products at lower prices, Korean suppliers are confident that they can capture more orders from Chinese EV manufacturers. Besides LG Chem, Samsung SDI and SK Innovation are now ramping up investments in China as well.
An article published last December on just-auto.com, a website for auto industry news, said that LG Chem anticipates that its EV battery business will turn a profit for the first time in the fourth quarter of 2018.
Source: energytrend
