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Photo = LG Chem |
[Alpha Biz= Reporter Kim Jisun] LG Chem has decided to reduce its planned capital expenditure (CAPEX) from 4 trillion won to 3 trillion won, taking into account the temporary stagnation in electric vehicle demand, known as the 'chasm,' and the rapidly changing business environment.
On the 25th, during the 2024 Q2 earnings conference call, LG Chem stated, "We initially planned to execute facility investments of 4 trillion won this year," but added, "Considering the changes in market conditions, demand growth trends, and environmental uncertainties, we have reduced the investment to around the low 3 trillion won range, similar to last year's level."
They further mentioned, "In the short term, instead of expanding investments, we are focusing on asset efficiency and developing innovative products with competitive pricing. We will continue with a conservative investment strategy, determining expansion sizes based on existing contracts."
This adjustment is attributed to delayed recovery in the petrochemical sector and weak demand in the advanced materials sector. In fact, LG Chem's operating profit in Q1 this year was 264.6 billion won, but the petrochemical division recorded an operating loss of 31.2 billion won.
During the conference call, LG Chem also announced a reassessment of its expansion plans for the separator business, a key component of secondary batteries. The company stated, "We are fully re-evaluating the expansion plans for the separator business considering the demand growth for battery materials and the competitiveness of Chinese separator manufacturers."
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
