LG Chem CEO Kim Dong-chun speaks during a town hall meeting at the company’s head office in Seoul on Monday. Photo by LG Chem
SEOUL, June 23 (UPI) — South Korea’s LG Chem said Tuesday it will invest nearly $10 billion over the next decade to foster futuristic industries powered by the artificial intelligence boom.
The Seoul-based company plans to spend $9.7 billion on research and development through 2035, concentrating on advanced materials for semiconductors, mobility, robotics and anticancer drugs.
LG Chem said that the initiative comes as profitability in its traditional petrochemical business dipped because of global oversupply and fierce competition.
Through the investment, the chemical giant vowed to achieve a double-digit operating profit margin by the end of the decade.
To complement its organic growth strategy, LG Chem said it will pursue external growth opportunities, including mergers and acquisitions. It recently established an organization dedicated to that goal.
LG Chem unveiled the long-term strategy during a town hall meeting Monday, where CEO Kim Dong-chun stressed the need to strengthen both existing businesses and future growth engines.
“While strengthening the competitiveness of our existing businesses, we will focus our capabilities on future growth pillars to leap forward as a technology-driven converting company,” Kim said.
LG Chem defines a “tech-driven converting company” as an enterprise that leverages its accumulated technological expertise to create high-value-added products and differentiated profit streams.
The share price of LG Chem plunged 9.75% on the Seoul bourse on Monday, while the benchmark KOSPI plummeted 9.99%. LG Chem is a major subsidiary of LG Group, whose businesses also include LG Electronics, LG Display and LG Uplus.