[New Year's Address] LG Chem CEO Dongchun Kim: "No Retreat... We Must Be Prepared to 'Break the Cauldrons and Sink the Boats'"

New Year's Message on Overcoming Crisis Amid Petrochemical Downturn
"Focusing on 10- to 20-Year Competitive Edge, Not Short-Term Market Trends"
"Accelerating Innovation by Pursuing Ambitious Goals"

Dongchun Kim, Chief Executive Officer (CEO) of LG Chem, announced a new management policy for the new year, stating that the company will transform its business and organization as a whole in response to the rapidly changing industrial environment. Amid a downturn in the petrochemical industry that has continued for over four years, Kim’s strategy is to break through the crisis not by relying on short-term market fluctuations, but by restructuring the business based on mid- to long-term competitiveness.

In his New Year’s address on January 5, Kim stated, “We are in a very desperate situation,” adding, “All employees must eliminate any retreat and face change with the determination of ‘breaking the cauldrons and sinking the boats’.” This phrase means to prepare for a decisive battle without any thought of retreat. Kim directly conveyed to the organization that survival can no longer be guaranteed by following existing methods.

Dongchun Kim, Chief Executive Officer (CEO) of LG Chem. LG Chem

He assessed the recent business environment by saying, “Changes in technology and the competitive landscape are different from the past cyclical ups and downs.” He pointed out that the proliferation of artificial intelligence (AI) is transforming the semiconductor, robotics, and autonomous driving markets, while oversupply and geopolitical uncertainties are converging, leading to the emergence of new competitors and shifts in company rankings simultaneously.

In this environment, Kim presented the following as the company’s key management tasks for the future: ▲ an innovative approach ▲ selection and concentration ▲ innovation in work methods.

Regarding the business portfolio, he announced that decisions would be made based on competitiveness 10 to 20 years into the future, rather than short-term market conditions. Kim said, “Even if the market improves somewhat over the next two to three years, we must look at whether we can maintain a competitive edge in the long term,” adding, “We need to focus on high-profit businesses that have high technological barriers and are closely aligned with customers.”

He also stated that the principles of selection and concentration would be clarified further. “There have been cases where resources were dispersed during the process of pursuing new businesses,” he said. “We will clearly set strategic priorities and adjust areas that do not align with our strategy.” While continuing to invest in early-stage projects, the company plans to concentrate its limited resources on core technologies and key new business areas that provide a competitive advantage.

He further announced that the company would introduce ‘AI Transformation (AX)’ and ‘Objectives and Key Results (OKR)’ company-wide to accelerate innovation. OKR is a performance management method that sets ambitious goals and checks whether they have been achieved through specific metrics and outcomes. Unlike the traditional approach of evaluating annual plans at the end of the year, this system reviews goals and execution results in short cycles and adjusts direction accordingly. This reflects a management principle that emphasizes speed and execution during times of crisis.

Kim said, “Achieving the same level of tasks as others will not create differentiation,” emphasizing, “The entire organization must engage in intense discussions and commit through interdepartmental collaboration.” He added, “If we accumulate these experiences of innovation, we will develop the capability to overcome any crisis. Let’s build a company where all employees can trust, rely on each other, and feel proud.”