SK Nexilis budgets $589 mn to build first overseas copper foil plant in Malaysia

[Photo provided by SK Nexilis Co.]

SK Nexilis Co., the copper foil making unit of SKC Group, has tapped Malaysia as the site for its first offshore manufacturing base to meet surging demand for the key component of electric vehicle batteries.

SK Nexilis will spend 650 billion won ($589.5 million) to build the plant that would be capable of producing 44,000 tons of copper foil a year, the company said Tuesday.

The plant will be situated in Kota Kinabalu Industrial Park, Sabah State, and run entirely on renewable energy, the first of its kind in the industry, the company said. Construction is scheduled to begin in the first half of this year, with commercial operation to start in 2023.

The new plant will triple the company’s current output to 100,000 tons per year.

Copper foil is a thin copper plate that acts as a negative electrode collector. It is an essential material used to make lithium-ion batteries. The EV market worldwide is expected to grow an average 41 percent per year through 2025, according to SNE Research. This will boost demand for copper foil, which is also projected to see annual growth of 40 percent.

SKC, the chemical unit of South Korea’s third-largest conglomerate SK Group, acquired SK Nexilis, formerly KCFT, for 1.2 trillion won in January 2020. SKC is focused on copper foil while its affiliate SK Innovation is centered on EV batteries.

Malaysia is said to have been picked for its favorable energy and logistics infrastructure. Kota Kinabalu offers low electricity costs and stable energy supply. It has a port and an international airport nearby and is close to battery plants in China. The Malaysia site spans an area of 400,000 square meters, three times the size of the company’s Korean plant, allowing for possible expansion in the future.

At home, SK Nexilis has four copper foil production facilities in Jeongup-si, North Jeolla Province. Two more plants are nearing completion and will be fully operational this year.

SKC and five other SK Group affiliates became the first in Korea to join RE100, a global initiative bringing together global businesses to commit to 100 percent renewable electricity.

SK Nexilis plans to automate its Malaysia plant, incorporating the robotic technologies it has adopted at its Korean sites.

The company said it is eyeing further investments in Europe and the United States, with an aim to expand its output by more than five-fold by 2025.

[ⓒ Maeil Business Newspaper & mk.co.kr, All rights reserved]