South Korean battery giant LG Chem has confirmed plans to invest the equivalent of more than US$1 billion to expand its battery manufacturing capacity in eastern China.
LG Chem signed a 1.1 trillion Korean won (KRW) investment contract with municipal and city leaders to include building a third plant in Nanjing, which will produce electric vehicle (EV) batteries.
According to the agreement, LG Chem will invest KRW600bn in the new plant and an existing EV and small battery plant by 2020 respectively— all in the Nanjing Xinjiang Economic Development Zone.
Kim Jong-hyun, president of LG Chem’s battery business division said: “We will actively nurture three battery factories in Nanjing as Asian and global export bases.”
LG Chem said the expansion “is aimed at pre-emptively responding to the rapid growth of demand for non-IT cylindrical batteries… as well as continuously increasing pouch battery manufacture for EVs”.
The new plant is scheduled for completion in the fourth quarter of 2019. LG Chem did not give details about production capacity. However, Chinese media reported last year that proposals had been mooted for a plant to produce lithium-ion batteries for 100,000 new energy vehicles annually for the likes of Hyundai, Volvo, General Motors, Renault and Chrysler.
It is more than four years since LG Chem announced its first lithium-ion battery foray into Nanjing.
BEST Battery Briefing reported at the end of 2018 that LG Chem and Korean peers Samsung SDI and SK Innovation were backing a government-led “next-generation batteries investment fund”— in part to challenge China’s dominance of the global market.