Koo Kwang-mo, CEO of LG Corp., visited the United States and Brazil to review a future growth strategy centered on "energy," the infrastructure that will underpin the age of artificial intelligence (AI), and the emerging "Global South" markets. The Global South is a term that collectively refers to non-Western emerging markets such as India and Brazil.
According to LG Corp. on the 2nd, Koo visited Vertech, an energy storage system (ESS) system integration (SI) subsidiary of LG Energy Solution in Westborough, Massachusetts, on the 30th local time. Vertech is an ESS business subsidiary that LG Energy Solution established in February 2022 after acquiring NEC Energy Solutions.
At the site, Koo said, "We must secure a business foundation that does not waver under any external conditions," and added, "In particular, beyond supplying ESS battery hardware, we need to strengthen our integrated solution capabilities that provide higher added value to customers and build an overwhelming, market-leading position."
This is understood to mean that, as future battery demand surges for AI data centers and physical AI, integrated solution capabilities that combine hardware and software are crucial to preempt business opportunities.
LG aims for qualitative growth in its battery business for the AI-era energy infrastructure market by adding software-based operation and management capabilities to its world-class battery manufacturing competitiveness.
The ESS market is growing rapidly due to factors such as the spread of AI data centers, industrial electrification, and the expansion of renewable energy. In particular, in high-performance computing environments such as AI data centers, ESSs are becoming key infrastructure for optimizing power loads and ensuring supply stability, going beyond simple storage functions.
According to energy-focused market research firms, the global ESS market, at about 300 gigawatt-hours (GWh) last year, is expected to expand to 750 GWh by 2030, nearly 2.5 times larger.
LG is focusing on a preemptive response. First, LG Energy Solution introduced LFP (lithium iron phosphate) batteries, which have emerged as the mainstream in the global ESS market, in a timely manner. In line with surging North American demand, it is converting five local production sites into ESS production lines. Currently, LG Energy Solution is the only company producing and supplying ESS batteries in North America.
LG Energy Solution is also strengthening synergies with Vertech. Vertech has system integration capabilities that cover design, installation, maintenance, and software-based operation and management, which are core competencies of the ESS business. For customers choosing LG's ESS, it effectively means they can handle everything at once, from battery supply to installation and after-sales service.
After completing the Vertech schedule in the United States, Koo traveled to Brazil to visit LG Electronics' Manaus production subsidiary and local retail stores to discuss strategies for the Latin American market.
Brazil, with a population of about 210 million and accounting for about 40% of Latin America's total GDP, is considered a key country in the Global South. After visiting India in February and Indonesia in June last year, Koo visited Brazil this time, accelerating efforts to target the Global South, which has a combined population of 2 billion.
LG Electronics' new refrigerator plant under construction in Paraná state in southern Brazil will go into full operation in Jul. It is seen as a strategic base to overcome high import regulations and tariff barriers and strengthen dominance in Latin America. In line with market characteristics marked by strong protectionism, the plan is to respond swiftly to domestic demand in Brazil and secure logistics efficiency.