LG Chem share price falls nearly 2% after deadly gas leak in India

SEOUL: The share price of South Korean chemical compounds and battery maker LG Chem Ltd dropped virtually 2% on Thursday after a gas leak at a manufacturing unit operated by a unit in India killed at the least 9 individuals, and led to a whole lot extra being handled in hospital.

The leak was introduced beneath management after being found by a upkeep employee on the evening shift on the LG Polymers plant, exterior the east coast metropolis of Visakhapatnam, in India`s southern Andhra Pradesh state, in line with an organization spokesman.

Police in India mentioned that 9 individuals died, and emergency providers rushed greater than 300 individuals, principally villagers dwelling close by, to hospitals. Around 1,500 individuals have been evacuated from their houses.

The firm spokesman mentioned manufacturing on the plant had been suspended due to India`s nationwide lockdown to cease the unfold of the coronavirus outbreak, however it was making ready to renew operations.

LG Chem mentioned in a press release that the gas emitted in the leak could cause nausea and dizziness when inhaled. It mentioned it was looking for to make sure casualties acquired therapy rapidly.

“We are currently assessing the extent of the damage on residents in the town and are taking all necessary measures to protect residents and employees in collaboration with related organizations,” LG Chem mentioned in the assertion.

The firm added it was investigating the reason for the accident.

Shares in LG Chem, South Korea`s main petrochemical maker by capability, ended down 1.94 % in a flat broader market.

The firm provides electrical car batteries for General Motors and Volkswagen and others. Its home peer Lotte Chemical ended flat.

Analysts say the incident shouldn’t have a serious impression on LG Chem`s backside line, because it didn’t have an effect on main operations, however they have been cautious of any potential fallout.

“Given that casualties are large, eyes are on whether this will lead to any criticism within India,” Hwang Yu-sik, an analyst at NH Investment & Securities in Seoul mentioned.

“It’s not clear yet the amount of compensation for losses to residents, and if it halts operations, opportunity loss won’t be much, less than 10 billion won ($8.17 million) as it’s a small one,” Roh Woo-ho, an analyst at Meritz Securities.

LG Chem took over Hindustan Polymers and renamed it as a LG Polymers India Private Limited (LGPI) in 1997, and the Indian unit posted a income of 223 billion received ($181.95 million) and a web revenue of 6.three billion received final 12 months.

LG Chem is an affiliate of LG Electronics, a smartphone maker.

An explosion in 2012 at a LG Chem plant in South Korea making supplies for smartphone shows, killed eight individuals and injured three, in line with a courtroom doc.

A 12 months in the past, rival Hanwha Total Petrochemical suffered a leak from a styrene monomer unit at its plant in South Korea, resulting in a whole lot of employees and residents being handled in hospital.

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