[Exclusive] LG Chem to Reduce PVC Production Capacity by Over 10%... Plans to Mass-Produce High-Value Products

Some Production Lines in Yeosu Industrial Complex
Shifted to Manufacturing Products for Electric Vehicle Charging Cables
"Developing Applications in Line with Electric Vehicle Growth"

LG Chem will start producing high value-added polyvinyl chloride (PVC) from next year. The company plans to reduce general-purpose products whose competitiveness has declined due to low-priced competition from China and supply plastics suitable for high-demand products such as charging cables for electric vehicles.

According to the industry on the 12th, LG Chem has decided to convert part of the PVC production line in the Yeosu Industrial Complex, Jeollanam-do, into a production facility for 'ultra-high polymerization PVC' and recently began maintenance work. As a result, LG Chem's PVC production capacity decreased by 12.5%, from 1.28 million tons per year to 1.12 million tons. A company official explained, "We are developing new high value-added materials in line with the growth of electric vehicles," adding, "Profitability is expected to improve."

LG Chem Yeosu CNT Plant. Photo by LG Chem

PVC, a representative general-purpose plastic, is widely used as a building material. It is heavily influenced by the construction industry, its primary sector, and overall demand has shrunk as the largest market, China's real estate market, has stagnated. In a recent Q3 earnings conference call, LG Chem assessed, "While a recovery in the real estate market is expected due to China's stimulus policies in the PVC sector, a dramatic improvement in performance seems difficult."

LG Chem is shifting its portfolio by reducing existing PVC and transitioning to high value-added products. Ultra-high polymerization PVC is used as a material for electric vehicle rapid and ultra-rapid charger cables. The higher the polymerization degree, the stronger the molecular bonds, significantly improving heat resistance and durability compared to conventional PVC.

Mass production is scheduled to start from the first quarter of next year. The company stated, "Ultra-high polymerization PVC improves the flexibility, which is the biggest drawback of existing charger cables," and added, "Although domestic electric vehicle charger cable materials have mainly been imported, we expect to replace them with domestically produced materials."

According to energy research firm SNE Research, the global electric vehicle charging infrastructure market is expected to grow from $44.1 billion in 2022 to $418.2 billion by 2030. The domestic market is projected to grow at an average annual rate of 45%, from $1.1 billion in 2022 to $22.4 billion in 2030.

The production of high value-added synthetic resins aligns with LG Chem's overall business restructuring strategy. In its Q3 earnings announcement, LG Chem revealed plans to reduce non-core or aging general-purpose product lines and strengthen differentiated high value-added products. Following the shutdown of the Yeosu Styrene Monomer (SM) plant in March, the company is also considering the sale of its second naphtha cracking center (NCC) plant.