LG Chem plans to invest 1 trillion won ($890 million) into research and development this year, including 130billion won in life science business, a top company official said.

In a news conference at the company’s R&D center in Daejeon Friday, Vice Chairman and CEO Park Jin-soo also said the company would beef up its R&D workforce to 5,300 this year and to 6,500 by 2020.

LG Chem has increased its R&D expense by 10 percent or more every year, from 780 billion won in 2016 to 1 trillion won in 2017 and to an estimated 1.4 trillion won in 2020. Among the total, it has allocated 130 billion won to life science area this year.

“LG Life Sciences recorded 500 billion won in sales last year and invested 100 billion won, or 20 percent of its sales, into R&D,” Park said. “The amount may be insufficient (compared with foreign companies) in absolute terms, but the investment’s share out of sales wasn’t small. As our company has absorbed LG Life Sciences this year, we should work hard from now on.”

LG Chem is setting up a long-term vision in strategy and resource allocation of its life sciences division. It has yet to set up detailed plans but will focus on supplementing what was lacking in LG Life Sciences, especially, by replenishing its inadequate R&D infrastructure.

LG Life Sciences has boasted high R&D investment rate among the domestic drugmakers. LG Life Sciences invested 66.5 billion won into R&D in the first three-quarters of last year, compared with 125 billion won invested into R&D by Hanmi Pharm for all of 2016.

However, LG Life Sciences failed to distinguish itself except for vaccine and growth hormone areas. The development of new drugs, of course, takes a long time to produce a visible outcome, industry watchers said, but LG hasn’t shown a clear advantage compared with its competitors, such as Samsung which has jumped into the biosimilar business, or SK, which has focused on vaccines, they added.

Vice Chairman Park was upbeat, though. “The key in the recent merger lies with developing new drugs,” he said. “We will concentrate on developing new drugs and further strengthen our core capability that has recorded good results. Also, we will supplement our weak parts, including resources, in developing new medicines. We will increase sale from life science business to 2.5 trillion won by 2025”,

LG Chem has demonstrated its will to develop new drugs by recruiting Son Jee-woong, former vice president of Hanmi Pharm who has experience in the export of various technologies to develop new drugs to multinational drugmakers. And it will focus on cash-cow products, such as new synthetic medicines, vaccines, and biosimilars, making the most of “open innovation.”

Especially LG Chem will strengthen “external open innovation” to ensure successful market entry at an early stage and secure additional technological capability, company officials said. Toward this end, it will activate networks with various channels such as universities, research institutions, and other businesses and push for technological cooperation and introduction. Also, it plans to strengthen “internal open innovation” to make use of technologies accumulated in each division for years, through inter-unit collaboration, thus raising the rate of successful commercialization of R&D projects and expanding the creation of synergic effect in R&D fields, they added.

LG Chem will make the best use of “LG Science Park,” Korea’s largest integrated R&D complex under construction in Magok in suburban Seoul, as a research institution to create synergy among affiliates. The group’s research workforce now scattered in its Future Technology & Researcher Center and Life Sciences R&D Center, will move into the compound in the second half of this year.

“To attain the sales goal of 2.5 trillion won by 2025 is an ambitious plan but the company will do all it can to reach that goal,” Vice Chairman Park said.