Will the Future Car 'Battery Alliance' Expand to Lotte?

Jeong Eui-sun and Shin Dong-bin Chairmen's Sudden Meeting

Visit to Lotte Chemical Advanced Materials Plant, Discussion on Cooperation in Future Car Materials Sector

Lotte's Battery Slump - In-house Battery Challenge, Hyundai Motor Synergy Expected

[Asia Economy Reporter Park So-yeon] Chung Eui-sun, Chairman of Hyundai Motor Group, and Shin Dong-bin, Chairman of Lotte Group, held a private meeting on the 25th to discuss cooperation plans in the future car materials sector. Chairman Chung, who has met consecutively with Samsung, SK, and LG groups this year, is expanding the scope of cooperation related to the future car business to the top 5 groups.

According to business circles, Chairman Chung visited the Lotte Chemical Advanced Materials plant in Uiwang, Gyeonggi Province, along with executives on the same day. From Lotte, Chairman Shin and Kim Gyo-hyun, President of Lotte Chemical, welcomed them. This is the first time Chairman Chung has directly visited the Lotte Chemical plant.

The meeting between the two chairmen was reportedly arranged as Chairman Chung responded to Chairman Shin's request. The discussion focused mainly on cooperation plans between the two groups in the future car materials sector. The Lotte Chemical Advanced Materials Uiwang plant is where new materials that can be used for automotive interior and exterior parts are developed. It provides a comprehensive view of the trend toward high-performance materials that could become Lotte Chemical's main products in the future.

Regarding the private meeting between the heads of Hyundai Motor Group and Lotte Group, both belonging to the top 5 conglomerates, some suggest that the two groups could build a partnership to address each other's pressing needs. Among the top 5 groups, Lotte Group is the only one that has not achieved notable results in the battery industry, while Hyundai Motor Group faces increasing necessity for in-house battery production.

Lotte Chemical is seeking new growth engines beyond being a 'pure chemical company.' Last year, Lotte Chemical participated in the acquisition battle for Hitachi Chemical, a Japanese battery materials company, but lost. In May, Hitachi Chemical acquired a 4.69% stake in Showa Denko, a Japanese company. In September, Lotte Chemical invested approximately 300 billion KRW in a fund to acquire Doosan Solus, a producer of copper foil, a core battery material. This is seen as a strategic move to expand into the automotive battery materials sector.

Affiliate Lotte Aluminium also recently expanded its factory to increase production of battery-grade cathode foil. Chairman Shin, who stayed in Japan for an extended period this year and returned last month, has been actively managing on-site operations despite the COVID-19 pandemic. He is focusing intensively on the 'chemical' sector among affiliates, positioning it as a new growth engine, which aligns with this background.

Hyundai Motor Group also faces a significant challenge to establish in-house battery production capabilities beyond receiving finished batteries from battery companies to respond to the growing demand for electric vehicles and to secure price competitiveness. This is to reduce the proportion of battery costs in electric vehicle production and to prepare for battery supply-demand imbalances. A business insider said, "The top 5 groups cooperate within the future mobility ecosystem, but each has different interests. Since they must cooperate while competing fiercely, the chairmen are taking multifaceted approaches."