LG Chem will invest a total of 5 billion won ($4.2 million) over the next five years to foster an industry-academic partnership with Seoul National University (SNU) in the biology sector, the company said Monday.
This is the first time Korea’s most prestigious university has joined hands with a company on joint research to develop core technologies for the lucrative bio market.
Under the partnership, the Seoul-based chemical and battery firm and SNU will focus on developing such promising biotechnologies as crop protection materials.
“The competition for the green industry is getting tougher among countries, due to growing concerns over food shortage problems,” said Park Jin-soo, vice chairman and CEO of LG Chem. “We will do our utmost to strengthen the competitiveness of Korea’s green industry by closely collaborating with the nation’s leading academic body.”
The move comes as LG Chem identifies biotechnology as its next growth area, as part of its bid to diversify its business portfolio into the lucrative sector that comes with high growth potential. The company expects the global biotechnology industry to be worth $140 billion by 2020, up from $100 billion in 2014.
In September, the company unveiled its plan to integrate with LG Life Science, as part of its efforts to expand its presence in the high-tech agriculture business. LG Chem plans to finalize the merger by Jan. 1 through a board meeting with the biotechnology affiliate of LG Group.
Also in September, LG Chem introduced its grand blueprint to generate more than 5 trillion won in sales with its annual bio business by 2025, in a move to enter the world’s top five chemical companies.
Toward that end, the firm pledged to increase its annual investment volume in the red bio industry to 500 billion won. Red biology refers to the medical and pharmaceutical area, focusing on developing new drugs for such sectors as cellular therapy and antibody treatment.
According to LG Chem, the global red bio industry is worth 1,100 trillion won, and is expected to grow by 5 percent each year until 2020.
The latest achievement also comes as part of group-wide efforts to find the next growth area. At the start of this year, LG Group Chairman Koo Bon-moo urged executives of key affiliates to tackle growing market uncertainty by reforming its revenue streams and aggressively investing into promising new areas.