LG Chem’s plan to sell its optically clear adhesive (OCA) business to a Chinese company is facing resistance from employees, TheElec has learned.
Genzon Investment Group which wants to buy the business unit is hoping to retain existing employees but they are refusing to be transferred.
LG Chem signed a contract to sell its OCA business unit to Genzon for 60 billion won during the second quarter. The contract doesn’t include terms that guarantee the Chinese company securing the existing staff.
OCA is used in liquid crystal display (LCD) and OLED panels to attach various films on the panels.
LG Chem had acquired the business unit from LG Hausys back in 2016 for 80.5 billion won.
At that time, the unit contributed around 200 billion won in revenue per year but this has plummeted to around 500 million won per month due to lowered demand.
LG Group’s LCD business has contracted over the years and OLED panels that use OCA such as add-on OLED panels is in less demand. LG Chem exited its LCD polarizer and glass substrate businesses.
Genzon had offered to increase the salaries of existing staff by 30%. Out of the around 100 employees at the OCA business unit, only a few have agreed to move to the Chinese company.
LG Chem is mulling what to do with these staff as there aren’t positions left in its other business units.
Once the company scraps its OCA line, these staff won’t have a production line to work on.
LG Chem had already shifted its research staff related to the business to its battery business last year, before the latter split off to become LG Energy Solution.
This has caused LG Chem’s total employee number to drop from around 20,000 people to between 12,000 to 13,000 people.
An LG Chem spokesperson said some of its employees were negotiating their salaries with the Chinese company and this was their personal choice.
Staff that won’t join Genzon will be moved to different business units at LG Chem, they said.
A person familiar with the matter said LG Chem had not invested in its OCA operation since it decided to sell the business unit.
Customers of OCA are hoping the situation between LG Chem and Genzon gets resolved quickly, they said.