South Korean chemical company seeks to boost sales

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LG Chem is pushing to raise its sales by 15 percent every year for its yearly sales to reach 36.4 trillion won ($34 billion) by 2020, its chief executive said.

CEO Park Jin-soo said the country’s No. 1 chemical firm will foster energy, water, bio and material areas as new growth engines to ensure sustainable growth, stressing that the firm’s sales will surpass 30 trillion won next year and 35 trillion won the year after.

The remarks came on the sidelines of his participation in a news conference held at an industrial complex in Daesan, South Chungcheong Province, Friday. The updated business plan was embargoed until Sunday morning.

The Daesan complex is 14 million square meters in size where plants of Lotte Chemical, Hanwha Total and Hyundai Oilbank and LG Chem are located. LG’s 21 petrochemical plants, including a naphtha cracking center, take up 1.55 million square meters.

Park said a 15 percent annual growth rate was a challenging target, considering various uncertainties in the global petrochemical market such as the drop in exchange rates, but added LG Chem would achieve the goal through its competitiveness and potential that has led to the firm’s sustained growth so far.

“LG Chem has achieved magical growth since its establishment in 1947,” Park told reporters. “The firm has displayed its potential energy in desperate situations such as the Korean War in1950, foreign exchange crisis in 1977 and global financial debacle in 2008.”

Indeed, LG’s sales were just about 300 million won when it was set up, but the figure rose to 25.7 trillion won last year.

“Difficult situations are the same conditions for all,” Park said. “Despite hostile conditions, LG Chem will definitely achieve high growth through preemptive change, lavish investment and innovative technologies.”

He said the firm will take this year as an opportunity to make a leap forward in high growth, noting that it will significantly expand its investments in capital expenditures and R&D.

The firm plans to invest 3.8 trillion won in capital expenditures, a 52 percent increase year-on-year, and 1.1 trillion in R&D, a 22.2 percent increase year-on-year, in order to enhance its capability in new businesses such as water treatment and functional films.

The firm will also increase employment in battery and bio departments.

“1,500 will be employed this year, a 50 percent increase compared to last year,” Park said.

Stressing the importance of safety of its workers, Park said the company will invest 140 billion won, a 100 percent increase year-on-year, to enhance safety education.

Earlier, the firm invested 1 billion won to build a simulation center in the Daesan complex, in which employees can experience virtual accidents using virtual reality devices and learn how to cope with such accidents.

Through enhanced investment and employment, the firm will concentrate on nurturing and advancing future businesses by developing innovative batteries beyond limitations of existing ones and new material to keep abreast of the Fourth Industrial Revolution.

Park added that the firm is building additional factories with an investment of 400 billion won to increase its production capacity of elastomers, a high-value-added synthetic resin that bears characteristics of both rubber and plastic.

“Once the construction is complete in the second half of the year, our production capacity of elastomers will rise to 290,000 tons from 90,000 tons,” Park said, adding that this will take the firm to the global top 3 position in the area after Dow Chemical and Exxon Mobil.

The Korea Times

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