[Courtesy of LG Chemical]
South Korea's top cell battery maker LG Chem decided Monday to merge with its biotech unit, LG Life Sciences to diversify its business portfolio into the lucrative red biotechnology industry.
The merger to be completed on January 1 comes as LG Chem, a key unit of South Korea's LG Group, faces a tough challenge from Chinese and other competitors, especially in its main battery businesses.
LG Chem vowed to venture aggressively into the red biotech industry by spending up to 500 billion won (450 million US dollars) every year. "Through the merger that ensures a stable supply of funds, we will develop the red biotech business as our new growth engine."
LG Chem has already acquired South Korea's leading pesticides and fertilizer maker Dongbu Farm Hannong for 425 billion won.
Biotechnology has been identified as a potential new growth engine, as South Korea grapples with a decline in traditional exports. Red biotechnology is related to hospitals and healthcare.
Seo Jeong-sun, head of the Korea Biotechnology Industry Organization, has cited the establishment of precision medicine as "a major stepping-stone" for initiating precision medicine across Asia.
Aju News Lim Chang-won = cwlim34@ajunews.com
reporter
Park Sae-jin
swatchsjp@ajunews.com
