'Gumi 500 Billion Investment' Project Abandonment Rumor, LG Chem Says "Factory Groundbreaking by Year-End"

Gyeongbuk Province and Gumi City Officials Express Position in Working-Level Meeting
Rumors of Project Abandonment Since the 'Win-Win Job' MOU Two Years Ago

On July 25, 2019, President Moon Jae-in is seen taking a commemorative photo after the 'Win-win Gumi Job Investment Agreement Ceremony' at Gumi Convention Center, GumiCo, Gyeongbuk. From the left, Shin Hak-cheol, CEO of LG Chem; Jang Se-yong, Mayor of Gumi; President Moon; Lee Cheol-woo, Governor of Gyeongbuk; and Kim Dong-ui, Head of the Korean Federation of Trade Unions Gumi Branch.

[Asia Economy Yeongnam Reporting Headquarters Reporter Dongwook Park] The plan to build an electric vehicle battery cathode material factory by LG Chem Ltd., a core part of the 'Gumi-type Job Project in Gyeongbuk' announced ahead of the April 2019 general election, has not progressed even a step for over a year and a half, but LG Chem has expressed its intention to start construction within the year.

According to Gyeongbuk Province on the 8th, the province and Gumi City visited LG Chem Ltd.'s headquarters on the 26th of last month and held practical consultations with company officials regarding the promotion of the 'Win-Win Gumi Job' project.

At this meeting, the province and Gumi City conveyed the concerns of local residents about the delay in applying for the 'Win-Win Gumi Job' and the start of construction of the cathode material factory, urging the progress of the project.

In response, an LG Chem official said, "We are well aware of the public opinion of Gyeongbuk Province and Gumi City recently, and we are deeply reviewing ways to build the world's most advanced cathode material factory," adding, "Although investment has been delayed due to the COVID-19 situation, we will complete all procedures promptly and strive to start construction within the year."

LG Chem reportedly stated, "The construction of the Gumi cathode material factory is absolutely necessary to secure cathode material production capacity. The rumors of project abandonment recently raised by local media and others are completely unfounded."

Hwang Jungha, Director of Investment Attraction at Gyeongbuk Province, and Kim Chabyeong, Head of the Job Economy Division of Gumi City, said, "The province and Gumi City plan to complete all administrative support procedures for applying for the win-win job project with central government departments and for factory occupancy by the first half of this year."

Meanwhile, regarding the government's labor-management-civil-government win-win job creation project, Gyeongbuk Province and Gumi City signed a 'Win-Win Gumi Job' agreement with LG Chem in July 2019. At the time, even President Moon Jae-in attended the signing ceremony, raising high expectations for the project.

However, unlike other regions such as Hongseong-type in Gangwon (ultra-small electric vehicles) and Miryang-type in Gyeongnam (auto parts), LG Chem announced a 500 billion KRW investment plan in the Gumi 5 National Industrial Complex but has not fulfilled its promise to date.