Shin Hak-cheol, Vice Chairman of LG Chem, "We will secure cash and not give up investments for the future"

Shin Hak-cheol, Vice Chairman of LG Chem, is giving a greeting at the agreement ceremony for the secondary battery industry promotion industry-finance cooperation program held on the 9th at Magok LG Science Park in Gangseo-gu, Seoul. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Hwang Yoon-joo] Shin Hak-cheol, Vice Chairman of LG Chem, stated in his April CEO message to employees, "We will not give up on investments for the future." Amid concerns that the demand for electric vehicles in China and Europe may shrink due to the COVID-19 pandemic, LG Chem's message is interpreted as a commitment to continue investing in new growth engines such as the electric vehicle battery business.

On the 6th, Vice Chairman Shin presented three countermeasures to overcome COVID-19: ▲ Do what we can ▲ Improve cash flow ▲ Do not give up on future investments.

He emphasized the importance of research and development (R&D) investments in new business areas such as electric vehicle batteries and naphtha cracking facilities (NCC). He said, "Our implementation of an emergency management system is not to borrow from the future," and added, "We should proceed with essential tasks such as investments to execute our strategy as planned."

He also stressed, "The promised numbers represent the market's and shareholders' trust in us," urging that they must be kept.

Vice Chairman Shin also mentioned the importance of 'securing cash' by citing Apple, which secured $25.6 billion in cash liquidity at the end of 2008 when the global financial crisis was intensifying. At that time, Apple boldly launched innovative new products like the iPad during the recession, maintaining its market dominance based on its financial strength.

He said, "At the end of 2019, global Silicon Valley companies such as Amazon, Microsoft, Apple, and Google increased their cash assets," and added, "We also need to improve our cash flow."

He continued, "When the economy contracts and it becomes difficult to secure investment funds, cash becomes even more important," and said, "Let's review this year's plans for investments and expenditures and reexamine the contingency plan to adapt to the changed situation."

Furthermore, Vice Chairman Shin said, "Control what we can control," and stated, "Let's reduce failure costs and increase productivity and purchasing efficiency."

He said, "The choices in a global crisis are simple," and added, "As I have always emphasized, the tool we can immediately utilize this year is efficiency."

An LG Chem official said, "As the sense of crisis grows due to the COVID-19 situation, Vice Chairman Shin's message this time carries a different weight," and added, "It means that despite the crisis, we will steadfastly continue investments for the future."