Friday, November 05, 2010

LG Chem to Open New Electrolyte Production Plant in Holland

Only makes sense to bring the production of battery components to the place where we are making the batteries, right? Right. Hot off the state presses, 400 more jobs by 2012:

Governor Jennifer M. Granholm today announced that LG Chem, the South Korea-based advanced battery manufacturer with operations in Michigan, will establish a new electrolyte production plant in Holland in West Michigan, expanding the state’s battery supply chain. Today was the second day of the governor’s three-day investment mission to South Korea.

The new electrolyte production plant will be located near LG Chem’s $303 million battery cell plant in Holland which is under construction. The 600,000 square-foot battery cell plant is expected to be fully operational in 2012 with up to 400 employees.

“LG Chem formulates its own electrolyte, a key component of battery production,” Granholm said. “We appreciate LG Chem CEO Peter Kim’s assertion that the company intends to make this key component in Michigan. Today’s announcement sends a strong signal about the market potential for electric vehicles, and reaffirms LG Chem’s commitment to our state.”

The electrolyte production plant is in the design stage and the project will be presented to LG Chem’s board in the weeks to come. The governor and Mr. Kim also discussed the potential for bringing other key cell components currently made by LG Chem in South Korea to Michigan. The company made it clear that it would give strong consideration to bringing more material production to Michigan as cell production volumes increased to meet growing customer demand.

LG Chem, which is supplying the battery for the new Chevy Volt, has a new contract with Ford Motor Company to supply the battery for the 2012 Ford Focus BEV. LG Chem was awarded one of Michigan’s first-in-the-nation battery cell manufacturing credits, as well as a U.S. Department of Energy grant of $151.4 million to support its Michigan operations.

If we can attract the suppliers and get them established here, the better the chance we have at keeping the manufacturing here in the future if and when the Chinese catch up to the technology - and they are on their way. Beijing recently announced they are spending $15 billion to invest in electric cars and battery production so at this point they are still playing catch-up, but it won't be long until their government subsidized product competes with ours.

The race is on. Policy from Washington might make all the difference in our success, so keep your fingers crossed that the Republicans were serious about promoting the clean energy economy. Something tells me that Big Oil is going to call in their chits pretty soon - if they aren't already.