Stiff competition forcing LG Chem to focus on batteries

SEOUL -- Selling of a separator plant to Japan's Toray Industries would enable LG Chem to pour more resources into mainstay lithium-ion batteries amid growing challenges from Chinese and Japanese competitors.

By increasing procurement from Japanese manufacturers, the Seoul-based company hopes to raise the cost effectiveness of its finished products.

LG Chem makes some separators in-house and buys more from other companies. It has given Ube Industries a license to use its patented technology for enhancing separators' heat resistance and durability. The plant to be sold to Toray is not being used now. To maintain a technological edge, LG Chem will continue in-house production elsewhere.

Japanese manufacturers were ahead in developing lithium-ion batteries, but South Korea's Samsung SDI and LG Chem strengthened their market presence, taking advantage of the won's weakness through 2012. With the yen now weak, Japanese companies are staging a comeback. And Chinese manufacturers are quickly gaining technological expertise.