LG Chem Aims to Conquer Global Battery Market... Joins Forces with Financial Sector to Overcome COVID Crisis Head-On

[Asia Economy Reporter Hwang Yoon-joo] LG Chem is actively moving to dominate the global battery market, which is expected to grow to a scale of 200 trillion won, by partnering with financial institutions amid the global economic crisis caused by COVID-19.

On the 23rd, LG Chem announced that it held a contract signing ceremony for raising a Green Loan worth 550 million euros (approximately 700 billion won) with financial institutions including the Korea Development Bank. A Green Loan refers to a loan system restricted for use in eco-friendly sectors such as electric vehicles, renewable energy, and high-efficiency energy.

This Green Loan procurement is the first result of the 5-year, 5 billion dollar 'Industry-Finance Cooperation Program' signed last December between LG Chem and financial institutions including the Korea Development Bank, Export-Import Bank of Korea, and NongHyup Bank. Despite the tightened foreign currency procurement conditions due to COVID-19, it is evaluated that the funds were raised timely under favorable conditions through active cooperation with financial institutions such as the Korea Development Bank.

With this 700 billion won funding, LG Chem will be able to stably secure investment resources required for expanding its electric vehicle battery plant in Poland.

LG Chem plans to spend about 3 trillion won on facility investment in the battery sector this year. According to market research firm IHS Markit, the global battery market size is expected to exceed the memory semiconductor market by 2025, reaching 160 billion dollars (approximately 200 trillion won). Based on an order backlog of about 150 trillion won in electric vehicle batteries, LG Chem plans to achieve sales of over 30 trillion won in the battery sector alone by 2024.

Meanwhile, LG Chem and the Korea Development Bank have also decided to expedite the execution of a 150 billion won 'Win-Win Growth Fund' for material, parts, and equipment partner companies facing financial difficulties due to the prolonged COVID-19 pandemic. The Win-Win Growth Fund, established with 60 billion won from LG Chem and 90 billion won from the Korea Development Bank, is a low-interest loan fund to support partner companies' operational funds such as facility investments.

To ensure that partner companies struggling due to the prolonged COVID-19 spread can receive support within the first half of the year, both parties agreed to swiftly execute the fund through close cooperation. The loan limit per company is expected to be around 5 billion won, which will provide critical relief to partner companies in urgent need of operating funds.

Vice President Cha Dong-seok said, "This Green Loan procurement will greatly help us continue stable investments for the future of the battery business," adding, "We will actively cooperate with financial institutions and material, parts, and equipment partner companies to not only dominate the global battery market but also contribute to strengthening the national industrial competitiveness."

This content was produced with the assistance of AI translation services.