Parent South Korean, utility in trays & cups
LG Chem is an affiliate of LG Electronics, a smartphone maker
- Published 8.05.20, 6:18 AM
- Updated 8.05.20, 6:18 AM
- 2 mins read
LG Polymers India, from whose factory at Visakhapatnam the gas leaked, is a subsidiary of leading South Korean chemical firm LG Chem.
LG Chem took over Hindustan Polymers and renamed it as LG Polymers India Private Limited (LGPI) in 1997. LG Chem is an affiliate of LG Electronics, a smartphone maker.
The Vizag plant manufactures polystyrene that finds wide utility in the food service industry as rigid trays and containers, disposable utensils and foam cups, plates and bowls.
The company, according to its website, was established in 1961 as Hindustan Polymers by the Shriram Group for making polystyrene PS and its co-polymers at Visakhapatnam. The company merged with MC Dowell & Co Ltd of UB Group in 1978.
Viewing India as an important market for its aggressive global growth plans, LG Chem acquired Hindustan Polymers and renamed it LG Polymers India Pvt Ltd (LGPI) in July 1997.
The factory recorded 222.8 billion won ($181.8 million) in revenue and 6.3 billion won in net profit last year.
In Seoul, South Korea, the share price of LG Chem dropped almost 2 per cent on Thursday after the gas leak in India.
A company spokesman said production at the plant had been suspended because of India’s nationwide lockdown to stop the spread of the coronavirus outbreak, but it was preparing to resume operations.
LG Chem said in a statement that the gas emitted in the leak can cause nausea and dizziness when inhaled. It said it was seeking to ensure casualties received treatment quickly.
“We are currently assessing the extent of the damage on residents in the town and are taking all necessary measures to protect residents and employees in collaboration with related organizations,” LG Chem said in the statement.
The company added it was investigating the cause of the accident.
Shares in LG Chem, South Korea’s leading petrochemical maker by capacity, ended down 1.94 per cent in a flat broader market.
The company supplies electric vehicle batteries for General Motors and Volkswagen and others. Its domestic peer Lotte Chemical ended flat.
Analysts say the incident should not have a major impact on LG Chem’s bottom line, as it did not affect major operations, but they were wary of any potential fallout.
“Given that casualties are large, eyes are on whether this will lead to any criticism within India,” Hwang Yu-sik, an analyst at NH Investment & Securities in Seoul said.
“If it halts operations, opportunity loss won’t be much, less than $8.17 million as it’s a small one,” said Roh Woo-ho, an analyst at Meritz Securities.
An explosion in 2012 at a LG Chem plant in South Korea, making materials for smartphone displays, killed eight people and injured three, according to a court document.
A year ago, rival Hanwha Total Petrochemical suffered a leak from a styrene monomer unit at its plant in South Korea, leading to hundreds of workers and residents being treated in hospital.