The new move is to strengthen the Company’s global market position and lay the foundations required to secure additional production bases in the future
On the 11th, LG Chem announced that the Company will invest around 120 billion won to expand the tech center, a customer-tailored technical support facility, to the United States and Europe.
In addition, the Company will also construct a new ABS compound plant in the United States.
* ABS compound: The final process in the production of ABS products. The process of extruding the semi-finished products produced in the polymerization process with other raw materials to create various characteristics and colors, and create finished products that can be used by customers.
Tech center is a dedicated customer support organization that provides comprehensive technical solutions such as product development, quality improvement, and productivity enhancement to customers and partners who purchased LG Chem’s petrochemical products.
The ‘American Tech Center’ will be built in Ohio, US, and the ‘European Tech Center’ will be built in Frankfurt, Germany. Both centers will be three-stories high with a total floor space of more than 7,600㎡(around 2,300 pyeong).
Completion of construction and start of full-scale operation are scheduled to take place in 2023 for both centers.
Ohio has excellent convenience in terms of logistics and transportation, and is located in close proximity to LG Chem’s key ABS customers, which is used in automotive parts and construction & decoration materials.
Therefore, Ohio has favorable geographical conditions for LG Chem to expand the Company’s position in the North American market and strengthen responsiveness to local customers.
Frankfurt also has an excellent corporate environment such as convenience in transportation and proximity to customers, enough to serve as a hub city in central Europe, and it is also where LG Chem’s European sales entity is located, making it the best place to establish a tech center for customer support.
The American and European Tech Centers will each have various pilot facilities for customer-tailored technical support.
In addition, a total of 70 R&D personnel, including application technology teams such as extrusion processing and injection technology, and organizations dedicated to each major strategic product, will be stationed to provide technical support for customers.
The US and Europe are the main markets that account for more than 20% of global demand for LG Chem’s strategic products.
LG Chem plans to strengthen the Company’s global market position by establishing a customer response base that can provide rapid technical solutions in the region through the establishment of the tech center.
Completion of a global quadrilateral customer support system extending from Korea to China, the US and Europe
When the construction of the American and European Tech Centers are complete, LG Chem will have established a ‘global quadrilateral’ customer support system centered in Osan, Korea, extending to China, the United States, and Europe.
* Since establishing the first domestic tech center in 1995, LG Chem is now operating Osan Tech Center in Gyeonggi-do and Huanan Tech Center in China.
The Company is currently constructing a tech center in Huadong, China. (Planning to begin operations in 2022)
The American and European Tech Centers will focus on improving the technology of customers centered on automotive materials and packaging films, and will also contribute to the expansion of eco-friendly materials and related products such as PCR (Post-Consumer Recycle) technology.
In addition, the tech centers will also be used as the local base for recruiting overseas R&D talents in the future.
The Huanan/Huadong Tech Centers in China will contribute to improving the technology of Chinese customers, revitalizing the local economy, hiring outstanding talent, and contributing to the mutual benefit effect in the region.
Osan Tech Center will oversee domestic and global customer-focused technical support and focus on developing future processing technology.
■ ABS compound plant to be introduced together with the American Tech Center… to strengthen synergies for customer responsiveness
LG Chem will additionally invest around 60 billion won to also construct an ABS compound plant in the site of the Ohio Tech Center in the United States with an annual production capacity of 30,000
tons by 2023.
The plant will locally produce customized ABS products that reflect customer needs and this is expected to generate significant synergies with the American Tech Center in terms of strengthening customer responsiveness.
The North American market, which accounts for 10% of global demand for ABS, has a low self-sufficiency rate in the region and a high preference for local companies and products.
In particular, the demand for high value-add ABS with excellent heat resistance and weather resistance is continuously increasing due to the development of the automotive, construction and decoration materials industries.
LG Chem also plans to consider constructing an ABS polymerization plant to respond to North American customers as the petrochemical business areas expand in the future.
The introduction of the ABS compound plant and the American Tech Center is expected to strengthen intimacy with the customer and serve as a stepping stone for the expansion of the North American business.
Kug Lae Noh, President of the Petrochemicals Company, stated “Tech centers will strengthen customer responsiveness through customized technical support optimized to the local market and play a key role in making LG Chem’s strategic product lead the global markets. Starting from the customer’s pain point, we will provide differentiated insights to customers, and seek various ways to expand the global business based on this.”
Source: Company Press Release