Investing Approximately 120 Billion KRW to Establish 'Miju and Europe Tech Centers' by 2023
[Asia Economy Reporter Hwang Yoon-joo] LG Chem is expanding its specialized organization for close customer support. This is to strengthen its global market position and lay the foundation necessary for securing additional production bases in the future.
On the 11th, LG Chem announced that it will invest approximately 120 billion KRW to expand its customer-tailored technical support facilities, called Tech Centers, to the United States and Europe. Additionally, a new ABS compound plant will be constructed in the U.S.
The Tech Center is a specialized customer support organization that provides comprehensive technical solutions such as product development, quality improvement, and productivity enhancement to customers and partners purchasing LG Chem’s petrochemical products.
Completing a Global Four-Corner Customer Support System Connecting Korea, China, the U.S., and Europe
The 'Americas Tech Center' will be established in Ohio, USA, and the 'Europe Tech Center' in Frankfurt, Germany. Both locations will have three floors above ground with a total floor area of over 7,600㎡ (approximately 2,300 pyeong), scheduled for completion in 2023 and to begin full operation.
Ohio offers excellent logistics and transportation convenience, and is adjacent to major customers of LG Chem’s ABS used in automotive parts materials and construction and decorative materials, providing favorable geographic conditions to expand its North American market position and strengthen local customer responsiveness.
Frankfurt, serving as a hub city in central Europe, offers excellent corporate environments such as transportation convenience and customer proximity. It also houses LG Chem’s European sales corporation, making it an optimal location to establish a Tech Center for customer support.
The Americas and Europe Tech Centers will each be equipped with various pilot facilities for customized technical support. Additionally, about 70 R&D personnel, including application technology teams for extrusion processing and injection molding technologies and dedicated teams for key strategic products, will be stationed to handle customer technical support.
The U.S. and Europe are key markets accounting for over 20% of LG Chem’s global demand for strategic products. Through the establishment of these Tech Centers, LG Chem’s strategy is to build customer response bases capable of providing rapid technical solutions locally, thereby strengthening its global market position.
Once the Americas and Europe Tech Centers are completed, LG Chem will establish a 'global four-corner' customer support system connecting Osan in Korea, China, the U.S., and Europe. The U.S. and Europe Tech Centers will focus on enhancing the technological capabilities of customers centered on automotive materials and packaging films, and will also contribute to expanding eco-friendly materials and related products such as PCR (Post-Consumer Recycle) technology. Furthermore, they will serve as forward bases for securing overseas R&D talent in the future. The South China/East China Tech Centers will contribute to improving Chinese customer technology, revitalizing the local economy, recruiting excellent talent, and fostering regional coexistence. The Osan Tech Center will oversee technical support for domestic and global customers and focus on developing future processing technologies.
ABS Compound Plant Launching Alongside Americas Tech Center... Strengthening Customer Response Synergy
LG Chem will additionally invest about 60 billion KRW on the site of the Ohio Tech Center to build an ABS compound plant with an annual capacity of 30,000 tons by 2023.
This plant will produce customized ABS products reflecting customer needs locally, expected to create significant synergy with the Americas Tech Center in terms of strengthening customer responsiveness.
The North American market, accounting for 10% of global ABS demand, has a low self-sufficiency rate and a strong preference for local companies and products. Particularly, due to the development of the automotive and construction materials industries, demand for high-value ABS with excellent heat and weather resistance continues to increase.
LG Chem plans to consider entering the ABS polymerization plant sector to respond to North American customers as it expands its petrochemical business area. The entry of the ABS compound plant and Americas Tech Center is expected to strengthen intimacy with customers and serve as a foothold for expanding business in North America.
No Guk-rae, head of the Petrochemical Business Division, said, "The Tech Centers will play a key role in leading the global market with LG Chem’s strategic products by strengthening customer responsiveness through locally optimized customized technical support. Starting from the customers’ pain points, we will provide differentiated value to customers and explore various ways to expand our global business based on this."
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