LG Chem to Sell Water Treatment Business Unit to Focus on Strategic Restructuring and Growth Engine

LG Chem, a core chemical company of South Korea's LG Group, recently announced that it has entered into substantive negotiations with private equity Glenwood Private Equity on the sale of its water treatment business unit. The transaction is seen as an important move by LG Chem to optimize its business portfolio and strengthen cash flow management in a complex business environment.

The water treatment department is mainly engaged in the manufacture of reverse osmosis membranes (RO membranes), occupying the second largest market share in the world. The products are widely used in seawater desalination and industrial circulating water treatment. According to the 2024 financial report, the division achieved revenue of 250 billion won and earnings before interest, tax, depreciation and amortisation (EBITDA) of 65 billion won, with a valuation of about 1 trillion won (about $0.695 billion). Its RO membrane factory in Qingzhou City, Zhongqing North Road, won 125 billion won in 2023 and aims to double its production capacity within five years.

acquirer Glenwood is headquartered in Seoul, with $3 billion in assets under management and a deep connection with LG Group. In 2023, the company acquired LG Chem's diagnostic business (now renamed Invitros) for 130 billion won. If the acquisition is reached, Glenwood plan to create synergies between the water treatment business and Techcross Environmental Services in its portfolio. Formerly a HiEntech company, Techcross was acquired by Glenwood in 2024 from the Bubang Group, which was formerly part of LG Electronics' wastewater treatment division.

industry analysis pointed out that the divestiture plan is highly compatible with LG Chemical's strategy to accelerate the focus of its core business. At the shareholders' meeting on March 24, Xin Xuezhe, vice chairman and CEO of LG Chemical, made it clear that in the future, it will deepen its layout around the three major areas of advanced materials, life sciences and sustainable development, and enhance its competitiveness through "strategic trade-offs. LG Group President Gu Guangmo further stressed the urgency of change at the senior management meeting on March 27, asking the management to "get rid of path dependence and ensure a high degree of unity between strategy and implementation", and bluntly said that "the enterprise has limited resources and must have clear priorities".

's deal is seen as the latest example of a business restructuring within the South Korea chaebol system. Referring to SK Group's recently completed energy and semiconductor business split, LG Group is strengthening its competitiveness in its core areas through a "slimming" strategy. Market observers believe that in the context of accelerating the integration of the global chemical industry, LG Chem's move can not only release the value of non-core assets, but also provide strategic resource tilt space for the three growth engines.