LG CHEM is reportedly proceeding with workforce reassignment in its separator business, one of the materials for secondary batteries. This action is a response to deteriorating revenue due to the electric vehicle chasm and intensified competition with Chinese separator manufacturers.
According to the industry on the 3rd, LG CHEM is said to be pushing forward with workforce adjustments at its separator factory in Cheongju, North Chungcheong Province. The plan includes halting the operation of low-speed production lines that have decreased productivity and reallocating low-speed production line personnel to high-speed production lines during the first half of the year to enhance production efficiency.
The separator is intended to block contact between the positive and negative electrodes to prevent battery explosions. LG CHEM is struggling due to the ongoing slowdown in the separator market driven by the chasm and the supply of low-cost Chinese products.
In response, the originally planned business expansion has undergone a comprehensive review. LG CHEM was set to establish a separator fabric line in Hungary in collaboration with Japan's Toray, but is currently reconsidering the related plans.
During the earnings announcement conference call in February, LG CHEM noted that "the separator market is expected to continue facing a slowdown and increasing competitive pressure moving forward," adding that the company is currently reviewing the expansion of its joint venture (JV) in Hungary and is exploring ways to enhance its business competitiveness.