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SKorean Battery Manufacturer LG Chem Aims to Rely Less on Japanese Vendors

South Korea’s LG Che is driving for the localization of some battery components in an effort to cut back its reliance on Japan amid a heightening political and economic strife, its president said Wednesday.

LG Chem, which counts Apple and General Motors as prospects for batteries utilized in phones and electric autos, is bracing for the possible fallout from an escalating trade conflict with Japan arising from the latter’s wartime past.

Efficient Wednesday, Tokyo fell South Korea from a so-called “white list” of approved trade associates, which could result in more documentation and on-site review for some Japanese exporters.

Speaking at a battery conference, Kim Myung Hwan, president of LG Chem, said the corporate is testing products of South Korean container filmmaker YoulChon Chemical, citing ambiguity about Japan imports.

LG Chem has relied heavily on Japan’s Dai Nippon Printing and Showa Denko KK for bags for its lithium-ion batteries. The joint market share in the world battery bag market of the two Japanese firms is about 70%, in line with trade tracker SNE Research.

“I expect we wouldn’t have any problems with those Japanese companies if they follow the compliance guidelines; however, we’re in the scenario where the Japanese authorities could say various things if they wanted,” Kim added.

Changing vendor companies won’t be easy; however, as it will take quite a while for LG Chem to run a series of checks and talk about the matter with clients, said a trade source with knowledge of the matter.

LG Chem’s comments came after the South Korean government said Wednesday it would invest over 5 trillion won ($4.12 billion) in research and growth for local materials, components and equipment between 2020 and 2022.

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