LG to drive future growth in emerging markets with battery prowess

LG Group, South Korea’s fourth-largest conglomerate by assets, should step up its efforts to foster future growth with promising technologies, especially electric vehicle batteries, in emerging markets amid shifting geopolitics, urged its chairman during his business trip to Indonesia.

“While facing intensifying competition, it is also important to prepare the future, five years ahead, by sharpening our focus and channeling our resources into areas that will set us apart from rivals,” Koo Kwang-mo said during his meeting with officials of LG Electronics Inc.'s sales operation in Jakarta, Indonesia, last week.

The visit underscored LG’s effort to assess the entire value chain in Indonesia, from manufacturing and research to sales and retail. Koo toured the Korean electronics giant’s manufacturing plant and R&D center in Cibitung.

Indonesia was the second emerging market the chairman has visited so far this year after his trip to India, the world's most populous country, in February.

Indonesia, Southeast Asia’s largest economy with the world’s fourth-largest population, is a key market for LG’s long-term expansion.  

Its appliance unit not only serves the domestic market but also exports home appliances from its Indonesian plant to Asia, the Middle East and Africa.

BATTERY HUB

A highlight of Koo’s trip to Indonesia was his visit to HLI Green Power, a battery-manufacturing joint venture between LG Energy Solution and Hyundai Motor Co.

The battery cell plant, which spans 320,000 square meters, has an annual capacity of producing 10 gigawatt hours (GWh) of batteries, enough to power 150,000 EVs.

It started mass production in April last year, achieving a production yield of 96% within four months.  

According to SNE Research, LG Energy Solution’s battery adoption worldwide reached 28.9 GWh in the first four months of this year, up 15.6% from the same period of last year.

It is the second-largest share in the global EV battery market, excluding China, after China’s CATL, but the share dropped to 21.8% from 23.9% over the same period.

Koo emphasized EV batteries remain the group’s core future growth engine despite the prolonged EV market slump and urged its employees to focus on enhancing LG’s competitiveness in the battery business.

With the world’s largest nickel reserves, a key material for EV batteries, Indonesia has emerged as a strategic EV hub in Southeast Asia.

Since advancing into the country in 1990 for the first time with the electronics affiliate, LG has expanded its local operations to 10, including four manufacturing plants, LG Innotek Co., LG CNS Co. and LG Energy Solution Ltd.

Write to Chae-Yeon Kim at why29@hankyung.com
Sookyung Seo edited this article.