LG Chem is mulling a slew of measures to bolster its electric vehicle battery business, including a plan to spin off the battery unit next year, according to a news report Tuesday.

The report said an internal task force at LG Chem is currently operating with a schedule to spin off the battery business division as a subsidiary of the LG affiliate by July.

In response, LG Chem said, “The company is considering various measures in order to enhance competitiveness and value of the battery business,” in a statement submitted to the financial regulator.

“Yet, no decision has been made specifically,” it said.

Unlike the company’s petrochemicals business, the battery unit has been growing at a remarkable rate, with its sales rising from 3.56 trillion won ($3.06 billion) in 2016 to an estimated 8.54 trillion won this year.

Its operating profit, however, plummeted from 209 billion won last year to a loss of 355 billion won due to slower-than-expected growth of the electric vehicle market and unexpected fire accidents involving the firm’s energy storage system.

LG Chem Vice Chairman Shin Hak-cheol said in July that the company aims to increase the proportion of the battery business to 50 percent while reducing the petrochemicals unit to 30 percent in terms of the total sales by 2024. 

The speculation about the spinoff is gaining grounds as the battery unit has high growth prospects.

“Separation of the battery business with great growth potential seems plausible in terms of increasing efficiency in the decision-making process for new investments,” said an industry official. “It would be easier for LG Chem to cooperate with other businesses like automakers.”

Some industry officials are in support of a spinoff scenario, saying “The battery business has a very different nature compared to the petrochemicals business.”

Rumors about a spinoff have circulated several times before.

The company denied such rumors in 2008 and 2011.

“Although the sales are on the rise, an immediate spinoff plan seems less likely due to slower growth in profitability,” a company official said.

By Song Su-hyun (song@heraldcorp.com)