Policemen stand guard as people gather in front of an LG Polymers plant following a gas leak incident in Visakhapatnam on May 7, 2020. (Photo by -/AFP via Getty Images)
THE share price of South Korean chemicals and battery maker LG Chem Ltd dropped almost two per cent on Thursday (7) after a gas leak at a factory operated by a unit in India killed at least nine people, and led to hundreds more being treated in hospital.
The leak was brought under control after being discovered by a maintenance worker on the night shift at the LG Polymers plant, Visakhapatnam, in India’s southern Andhra Pradesh state, according to a company spokesman.
Shares in LG Chem, South Korea’s leading petrochemical maker by capacity, ended down 1.94 per cent in a flat broader market .
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 revenue of $181.95 million last year.
LG Chem is an affiliate of LG Electronics, a smartphone maker.
The company supplies electric vehicle batteries for General Motors and Volkswagen and others.
Police in India said that nine people died, and emergency services rushed more than 300 people, mostly villagers living nearby, to hospitals. Around 1,500 people were evacuated from their homes.
The company spokesman said production at the plant had been suspended because of India’s nationwide lockdown to stop the spread of the coronavirus outbreak, but it was preparing to resume operations.
LG Chem said in a statement that the gas emitted in the leak can cause nausea and dizziness when inhaled. It said it was seeking to ensure casualties received treatment quickly.
“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 said in the statement.
The company added it was investigating the cause of the accident.
“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 $8.17 million as it’s a small one,” Roh Woo-ho, an analyst at Meritz Securities.