LG Chem promises extra $14.4 million in aid over Indian gas leak

South Korea’s top chemicals maker LG Chem Ltd. said on Wednesday it will offer an additional 1.2 billion Indian rupees ($14.4 million) in humanitarian aid to villagers in India's southern state of Andhra Pradesh affected by a deadly gas leak at its plant in 2020.

LG will also set up a foundation in India to run a medical exam center to continue to examine the health of affected people and expand coverage of medical treatment to 15 categories at designated hospitals.

The pledges were announced at a meeting between LG Chem senior executives and Chandrababu Naidu, chief minister of Andhra Pradesh state, at his office on Tuesday.

“Even before the results of the ongoing court trial are out, we want to do our best to provide humanitarian support that can be of practical help to residents,” said LG Chem Vice Chairman Shin Hak-cheol.

The meeting was attended by LG Chem CFO Cha Dong-seok and the firm’s petrochemical business division chief Noh Kuk-lae.

Separately, LG Chem executives met with residents of the villages affected by the gas leak.

The Korean company said its senior executives were visiting India to provide swift support to people suffering from economic difficulties in the wake of the COVID-19 pandemic.

LG Chem said it will discuss with the government of Andhra Pradesh ways to extend its financial aid to some 5,000 households living near its chemical plant.

LG POLYMERS INDIA

According to LG and the Indian government, a gas leak occurred in May 2020 at a styrene monomer storage tank at LG Polymers India Pvt. Ltd. outside the east coast city of Visakhapatnam in Andhra Pradesh.

The accident killed at least 12 people and emergency services took more than 300 people, mostly villagers living nearby, to hospitals on the day the gas leak occurred.

LG Chem took over Hindustan Polymers and renamed it LG Polymers India (LGPI) in 1997.

The state government paid 375 million Indian rupees in compensation to the victims immediately after the accident, while LG Polymers has paid over 20 billion won ($14.4 million) in deposits as ordered by Indian authorities.

Civil and criminal trials are currently under way in India to determine the scope of LG’s responsibilities and compensation.

LG Polymers has participated in recovery operations in damaged areas, including providing food and hygiene products, donating drinking water and conducting water quality and soil tests.

So far, about 5,000 people have received medical services. In 2021, LG donated 80 tons of zeolite, a key material for air purification and oxygen supply, to Andhra Pradesh state during the COVID-19 pandemic.

PLANT RELOCATION TO SRI CITY

Operation of the LG Polymers plant has been suspended since the accident.

With the state permit, LG Chem is in the middle of relocating to a new plant in Sri City, some 780 km from the affected factory.

With fresh investment, the Korean company is expected to soon begin manufacturing engineering plastics compounds, called ABS, at the new plant, which has an annual production capacity of 50,000 tons.

Its existing property in Visakhapatnam will likely house machinery and other equipment used for safe, eco-friendly businesses, it said.

LG Chem has maintained employees at its Indian polymer plant over the past four years and said those wishing to move to the new plant will be allowed to do so.

When hiring additional workers for the Sri City plant, LG plans to give preferential treatment to those from the Visakhapatnam region.

Write to Woo-Sub Kim at duter@hankyung.com
In-Soo Nam edited this article.