SK Materials plans near $2 bn to expand battery materials capacity at home and abroad

SK Materials Co., IT materials unit under South Korea¡¯s SK Group, is planning near $2 billion investment next year to expand capacity in across-the-board materials for rechargeable batteries and renewable fuel following its planned merger with SK Inc. next month.

According to multiple industry sources on Sunday, Lee Young-wook, chief executive and president at SK Materials, outlined post-merger business plans with the objective to bump up sales by five times by 2025 during a meeting with analysts of investment banks.

Lee said that the merged entity will innovate its business portfolio to engage chips, battery, display, and environmentally-friendly materials sectors. It will expand investment in battery materials to include a wide range of areas from silicon anode materials, cathode materials and high-performance anode secondary materials.

SK Materials envisions sales ballooning to 5 trillion won ($4.2 billion) in 2025 from 1 trillion won in 2020 through aggressive expansion.

In 2022 alone, SK Materials will invest 2.2 trillion won, including 900 billion won in core areas of anode materials, precursor, and industrial gas, as well as cathode materials, carbon capture, utilization and storage (CCUS) business through its in-house independent company Materials CIC.

SK Materials plans to build a comprehensive cluster for battery materials from silicon anode materials to cathode materials at a 360,000 square meter site in Sangju in North Gyeongsang Province.

The company will produce 20,000 tons of cathode materials per year in Korea from 2023 through a joint venture between SK and a Chinese company and supply 50,000 tons in the United States from 2024.

SK Materials will also set up a four-way joint venture in Finland to build a cathode materials production facility in 2023 with annual production capacity of 50,000 tons.

The company will also engage in carbon nanotube conductors that are applied to high-performance electric vehicles such as Porsche Taycan. SK Materials is also in talks to build a joint CNT conductor factory with a Japanese company with the goal of launching operations in 2023.

Under plans announced earlier, SK Materials will be divided into two entities – investment and business. The investment part will merge with the parent SK and the business part will become a wholly-owned subsidiary. The merger will be effective from December 1.

SK shares were trading 1.17 percent lower at 252,500 won on Monday morning and those of SK Materials unchanged at 402,900 won.

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