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Battery Plant Fire Costing LG $85 Million

South Korean chemical manufacturer, LG Chem, said a fire at one of its rechargeable battery plants is expected to cause an $85 million loss in sales.

SEOUL, South Korea (AP) — LG Chem Ltd., South Korea's largest chemical manufacturer by sales, said Tuesday a fire at one of its rechargeable battery plants is expected to cause an 80 billion Korean won (US$85 million; euro56 million) loss in sales.
The fire, which broke out Monday evening at the plant south of Seoul, will affect battery production for two to three months, the company said in a regulatory filing. Production is currently halted, it said.
LG Chem's shares fell 0.8 percent Tuesday to close at 78,700 won (US$83; euro55). The stock dropped nearly 4 percent at one point before recovering in the afternoon.
The fire broke out at the plant south of Seoul at 7:30 p.m. local time Monday and was put out later that night, Dow Jones Newswire reported, citing an unnamed company spokeswoman. LG Chem was investigating the cause of the fire and extent of the damage, she said.
LG Chem has two rechargeable battery plants in South Korea, the spokeswoman said. The plant that has been shut down has a monthly production capacity of 13.5 million cells. The company's total monthly rechargeable battery production capacity is 23.5 million cells.
LG Electronics Inc., which receives rechargeable batteries from LG Chem for its laptop computers, said the fire won't affect its notebook computer business.
''We have a battery inventory of more than one month's worth and LG Chem is just one of the several suppliers for us,'' said LG Electronics spokesman Kim Jik-soo.
Analysts said the expected loss from the production disruption is insignificant in proportion to the LG Chem's annual revenue, and the impact on its share price is likely to be short-lived.
Both LG Electronics and LG Chem are members of the LG Group of companies.
Shares in LG Electronics rose 4.4 percent to 104,000 won (US$110; euro72).
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