LG Group’s subsidiaries are investing large amount of money into American R&D subsidiary in order to build up their fuel cell businesses and to develop ‘solid oxide fuel cell’, which is called third generation fuel cell. It seems that LG Group has taken step forward into developing this new fuel cell as they continue to make large amount of investments this year followed by last year.
According to industries on the 20th, LG Electronics, LG Chemicals, and LG CNS, which are subsidiaries of LG Group, recently invested $38.4 million (43.8 billion KRW) into LG Pure Cell Systems, which is LG Group’s American subsidiary that researches and develops fuel cells.
LG Electronics, LG Chemicals, and LG CNS invested $12.0 million (13.66 billion KRW), $21.5 million (24.527 billion KRW), and $4.95 million (5.641 billion KRW) respectively. However LG Corporation, which is the holding company, did not participate in this capital increase. After this capital increase, LG Electronics, LG Chemicals, LG Corporation, and LG CNS now have 30%, 26%, 12%, and 5.94% of shares of LG Pure Cell Systems.
It is heard that LG Pure Cell Systems is going to use this fund that it obtained through capital increase into R&D for fuel cell. It is likely that it will focus its investment into ‘solid oxide fuel cell (SOFC)’, which is currently being developed.
SOFC’s efficiency in electricity generation is far superior than current fuel cells and is also excellent in stability. It is expected that SOFC will replace most of fuel cells that are used for buildings and power generation when it is commercialized. Due to this reason, major South Korean and foreign fuel cell manufacturers are currently developing SOFC as their next generation technology.
LG Group is also working fast in developing SOFC in order to maintain its leadership in a field of fuel cell. LG Pure Cell Systems, is a fuel cell R&D corporate established in the U.S. by LG Group’s subsidiaries. They have invested about $176 million (200 billion KRW) until now by acquisition of shares and capital increase after acquisition. They have to continuously make investments into LG Pure Cell Systems until development of actual products as it is a R&D company. Reason why LG Group is continuing to make large amount of investments is because it wants to enhance its capabilities in a field of fuel cell. It is trying to push forward development of next-generation fuel cell technology and maintain its leadership in fuel cell markets.
Some are predicting that LG Group has made significant progress in development of SOFC as it has invested $47.8 million (54.5 billion KRW) and $38.4 million (43.8 billion KRW) in 2016 and 2017 respectively.
“We increased capital stock of LG Pure Cell Systems since we need continuous investments to develop next-generation fuel cell technology.” said a representative for LG. “However we have decided on when we are going to commercialize this new technology.”
Staff Reporter Kwon, Keonho | email@example.com