Lotte Chemical Targets 16 Trillion KRW Revenue from Hydrogen and Battery Materials by 2035

Hydrogen and Battery Material Sales Targets Raised
9 Trillion KRW for Hydrogen and 7 Trillion KRW for Battery Materials by 3035
Leading the Hydrogen and Battery Material Business Unit

Lotte Chemical has set a goal to achieve sales of 16 trillion KRW in the hydrogen and battery materials sectors by 2035. In addition to its current petrochemical-centered sales structure, the company plans to develop hydrogen and battery materials as the future industry's "dual engines."

In its recently released Sustainability Management Report, Lotte Chemical disclosed targets to reach 9 trillion KRW in hydrogen sales and 7 trillion KRW in battery materials sales by 2035. This significantly raises the sales targets compared to the "2030 Vision" announced last April, which aimed for 5 trillion KRW each in hydrogen and battery materials sales, just one year ago.

On a consolidated basis, Lotte Chemical's sales increased by about 4 trillion KRW from 18 trillion KRW in 2021 to 22 trillion KRW last year. However, due to sluggish petrochemical market conditions, first-quarter sales this year fell 9.5% year-on-year to 4.9323 trillion KRW. Poor performance is expected to continue into the second quarter. In this context, the company is making large-scale investments in hydrogen and battery materials to cultivate them as new "cash cows."

The company explained, "We have adjusted our hydrogen supply plans and sales and investment targets related to the hydrogen energy business, and after acquiring Lotte Energy Materials (formerly Iljin Materials), we have raised sales and investment targets for the battery materials business."

Lotte Chemical plans to supply 180 tons of hydrogen by 2035. It expects 1.4 million tons for power generation, 80,000 tons for electric vehicle charging stations, and 320,000 tons for bunkering (storage and supply). The company is designing a supply chain encompassing gray, blue, and green hydrogen, including a large-scale high-pressure hydrogen shipping center using by-product hydrogen at the Daesan plant site.

Hydrogen is classified by color according to its production process: by-product hydrogen that emits carbon dioxide is gray hydrogen; when carbon is captured and stored during this process, it is blue hydrogen. Hydrogen produced by splitting water using clean energy is green hydrogen.

Battery materials focus on aluminum foil, copper foil, electrolyte organic solvents, and separator materials. Lotte Chemical is constructing plants for polyethylene (PE) and polypropylene (PP) for separators, and high-purity ethylene carbonate (EC) and high-purity dimethyl carbonate (DMC) as battery electrolyte organic solvents. The organic solvent plant completed mechanical completion in the first half of the year and is preparing for commercial production. Additionally, Lotte Aluminum and Lotte Fine Chemical are conducting businesses in cathode foil and copper foil (with equity investment in Solus Advanced Materials), respectively.

Notably, on the 4th, Lotte Chemical announced plans to secure a leading position in the high-performance copper foil market through Lotte Energy Materials. Lotte Energy Materials aims for an order backlog of 15 trillion KRW this year and 20 trillion KRW by 2025. It is also pursuing research and development on solid electrolytes, third-generation silicon composite anode materials, and LFP (lithium iron phosphate) cathode materials.

Hwang Jin-gu, Head of the Hydrogen Energy Business Unit at Lotte Chemical (also CEO of the Basic Materials Business, left), signed a Memorandum of Understanding (MOU) for clean ammonia production with Tony Will, CEO of CF Industries, at Lotte World Tower in Jamsil in March.

To accelerate next-generation business initiatives, Lotte Chemical established the Hydrogen Energy and Battery Materials Business Units in April last year. Hwang Jin-gu, head of the Hydrogen Energy Business Unit (CEO of Lotte Chemical Basic Materials Business), and Lee Young-jun, head of the Battery Materials Business Unit (CEO of Advanced Materials Business), have each led their respective units for over a year.

Mr. Hwang, born in 1968, joined Honam Petrochemical, the predecessor of Lotte Chemical, in 1995 and has worked as an expert in the basic materials field for nearly 30 years. He is especially skilled in overseas business, having served as CEO of Lotte Chemical's U.S. subsidiary 'LC USA' from 2018 to 2020. In March, he achieved a milestone by signing a cooperation agreement with CF Industries, the world's largest ammonia producer in the U.S., for clean ammonia business collaboration in the U.S.

Mr. Lee, born in 1965, is a chemical expert from Samsung who joined Samsung General Chemicals (now Hanwha Impact) in 1991 and worked at Cheil Industries and Samsung SDI. He connected with Lotte in 2016 following the spin-off of the chemical division from Samsung SDI and became CEO of the Advanced Materials Business in 2020.

Joining them is Kim Yeon-seop, the inaugural CEO of Lotte Energy Materials. Born in 1963, Kim joined Hyundai Petrochemical in 1990 and came to Lotte during Hyundai Petrochemical's acquisition of Honam Petrochemical. Recently, he expressed his ambition to "secure a global leading position in the high-end copper foil market by 2028 with world-class, ultra-differentiated technology."

Lee Young-jun, Head of Battery Materials Business Unit at Lotte Chemical (Head of Advanced Materials Business, right), is taking a commemorative photo with Lee Jung-wook, CEO of DL Energy, after signing a Memorandum of Understanding (MOU) for joint development of renewable energy power generation projects on March 17 at Lotte Chemical's Uiwang plant in Uiwang, Gyeonggi Province.
[Image source=Yonhap News]