One Tesla deal propels little-known family to $800 million fortune
Now, with a single order from Elon Musk’s electric-car maker, another family has entered the ranks of the ultra-rich.
Shares in L&F Co., a producer of high-nickel cathodes that are key to making batteries for electric vehicles, have soared 82% this year as the South Korea company won a $2.9 billion order from Tesla. For Chairman Hur Jae-hong and people related to him, that means their listed holdings are now worth more than $800 million, according to the Bloomberg Billionaires Index.
The Tesla win cements Hur’s role as a dealmaker and provides a new source of wealth for his family, whose fortune has been closely tied to LG Group. While the US car-making giant has been using L&F’s cathodes for years through batteries supplied by LG Energy Solution Ltd., this is the first time it becomes a direct client — providing one of L&F’s biggest contracts ever.
“L&F has been ready for further growth,” said Wooho Rho, an analyst with Meritz Securities Co. in Seoul. “The company’s direction is centered on technology and production efficiency, so it seems to have good DNA.”
Hur’s great-grandfather, Huh Man-jung, co-founded in 1947 what has become LG, a conglomerate that produces everything from consumer electronics to electric-vehicle batteries. Another branch of the family set up energy-to-construction giant GS Group in 2004, while L&F began in 2000, after electronic-component manufacturer Seronics Co. — which Hur’s grandfather started in 1968 — decided to expand into LCD backlight units, mainly targeting LG Display Co. Seronics owns 14.4% of L&F.
Like L&F, shares of companies that provide components or materials used to make electric cars have surged in recent years, generating huge amounts of wealth for their owners.
Ryu Kwang-ji, the chairman of chemical manufacturer Kum Yang Co., has a stake worth some $1.4 billion after the stock jumped more than 1,600% in the past year, according to Bloomberg calculations based on the latest corporate filing. Ecopro Co., a maker of battery materials, has climbed about 500% in 2023 alone, boosting the value of founder Lee Dong-chae and his family’s holdings to $3.1 billion. The rise has raised eyebrows in the past, and Lee was convicted of trading with undisclosed information last year, a ruling that prosecutors have appealed for a different sentencing.
For L&F, which so far has made most of its revenue from LG Energy Solution, the Tesla deal could be transformational.
“The fact that its latest client is not any other but the one that’s leading the market carries even bigger significance,” Rho said.
L&F declined to comment for this story.
Hur, who’s been Seronics’s chief executive officer since his father’s death in 2010 and L&F’s chairman for five years, joined the family empire after studying chemical engineering at Seoul’s Yonsei University and earning a Master’s degree from the University of Southern California. He worked in the research department of LG Display, formerly known as LG Philips LCD, before moving to Seronics and L&F. He holds shares in both companies.
L&F began developing cathode materials for rechargeable lithium-ion batteries in 2005, which soon became its most significant business. Sales surged 10-fold to 3.8 trillion won ($2.9 billion) from 2020 to 2022, with LG Energy Solution accounting for as much as 80% of last year’s revenue.
But the cathode maker has been trying to diversify. In 2021, L&F signed a deal with US battery recycling company Redwood Materials, headed by Tesla’s former chief technology officer, JB Straubel. Redwood last year said it would supply Panasonic Energy Co. with cathode materials, which could lead to new customers for L&F, Meritz Securities’ Rho said.
L&F now forecasts its reliance on LG Energy Solution will drop to 50% of revenue by 2025, a research report by Shinyoung Securities Co. analyst Jin-soo Park noted in March. He added that unidentified manufacturers — presumably mainly Tesla — are expected to contribute to 30% of sales.
That’s “positive,” Park said of the diversification push.