LG Chem pivots to high-value materials, investing $10.7 billion by 2035

LG Chem is embarking on a significant strategic pivot, aiming to transform into a high-value materials company by investing 15 trillion won (approximately $10.7 billion) by 2035. This move comes amid challenges in its traditional petrochemical business, including global oversupply and intensified competition, as well as a recent downgrade in its credit rating.

The company's new vision, announced by CEO Kim Dong-myung, prioritizes growth in advanced materials for semiconductors, robotics, and mobility sectors, alongside developing anti-cancer drugs. This strategy represents a departure from its previous "Vision 2030," which focused on expanding its overall scale. The new approach emphasizes "profit sophistication" over sheer volume growth.

LG Chem has set an ambitious target of achieving a double-digit operating profit margin by 2030. This contrasts with its earlier goal, set in February 2022, of reaching 50 trillion won in revenue by 2030 (excluding LG Energy Solution). The company has already lowered its revenue target for 2024 to 23 trillion won due to the prolonged downturn in the petrochemical market.

To drive this transformation, LG Chem plans to allocate 70% of its 15 trillion won R&D investment to materials for semiconductors, mobility, and robotics. The company will focus on securing leading technologies and exploring new AI-based applications. It is also establishing a new business development unit directly under the CEO to accelerate strategy execution and exploring mergers and acquisitions to bolster its global competitiveness.

Key areas of focus include advanced packaging materials for semiconductors, such as adhesives, low-dielectric materials, and thermal management materials. For mobility and robotics, LG Chem aims to expand its business beyond electric vehicle components to include structural materials for robots and precision joining materials. The company also intends to strengthen its anti-cancer drug pipeline through global clinical trials and partnerships, ultimately aiming to become an "integrated solutions company" that designs both product performance and manufacturing processes.

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LG Chem will strengthen its existing business competitiveness while focusing its capabilities on future growth axes centered on materials (semiconductors, mobility, robots) and anti-cancer drugs to leap forward as a 'Tech-driven converting company'.