LG Chem will invest 500 billion won ($424 million) in building a 60,000 ton-capacity cathode material plant in Gumi, north Gyeongsang Province by 2024, the company said Thursday.

Cathode is one of the four main parts of a lithium ion battery, alongside the anode, electrolyte and membrane. The cathode accounts for 40 percent of the raw materials cost of electric vehicle batteries.

“Starting with the investment in Gumi, LG Chem will kick spur into producing its own core materials for batteries to increase business competitiveness,” said Shin Hak-cheol, the vice chairman of LG Chem, underlining the company’s hopes to stabilize the supply chain and improve raw materials cost competitiveness.

LG Chem will shoulder 100 percent of the budget for the Gumi plant, the biggest cathode plant yet for the company that is expected to create some 1,000 jobs directly and indirectly. The 60,000 metric tons of cathode materials is enough for about 500,000 pure EVs.

The company said it will also double the size of its existing Cheongju plant in north Chungcheong Province, whose yearly capacity is now 25,000 tons, at an undecided date.

LG Chem currently supplies EV batteries for Korea’s Hyundai and Kia Motors, US’ General Motors, Ford and Chrysler, Europe’s Audi, Daimler AG, Renault, Volvo, Volkswagen, Jaguar and China’s Geely Auto. The company’s accumulated EV battery deals surpassed 110 trillion won as of March.

LG Chem forecast its battery business sales will jump from 2018’s annual profit of 6.5 trillion won to 31.6 trillion won in 2024.

Meanwhile, LG Chem shares traded at 4 to 5 percent lower rates due to lackluster second quarter performance posting announced the previous day.

By Lim Jeong-yeo (kaylalim@heraldcorp.com)