SK On pledges W1.5tr to ramp up Korean production
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SK On announced Wednesday a 1.5 trillion won ($1.1 billion) investment in expanding the battery production capacity by adding a third plant in Seosan, South Chungcheong Province.
Marking the South Korean battery maker’s largest investment in the country, the expansion will bring up the Seosan site’s total annual production capacity to about 20 gigawatt-hours by 2028, enough to be supplied to 280,000 electric vehicles. The company will break ground for the third plant this year, aiming to begin initial operation in 2025.
The expansion plan appears to be in line with Hyundai Motor Group’s 2 trillion won investment to build an EV factory in Ulsan, located some 285 kilometers from Seosan. Hyundai announced in May that it aims to begin manufacturing EVs at the Ulsan plant in the second half of 2025, with an annual production capacity of up to 150,000 units.
Although the company did not specify how the investment will be spent, it mentioned that a major chunk of the 1.5 trillion won will be spared to purchase battery equipment.
The two existing plants at the Seosan site have produced 5 GWh of battery per year since 2018. SK On first set up the Seosan site in 2012 with a production capacity of 0.2 GWh. The Seosan site is SK On’s only Korean battery-producing foothold.
SK On said it will implement the latest equipment at Seosan’s latest battery-producing facility to make it into a smart factory with an optimized manufacturing process, adding that the new plant is expected to speed production by 30 percent compared to the existing manufacturing lines. The battery maker also plans to improve productivity at the other two plants in Seosan by remodeling the production lines.
“This investment is meaningful, as it will strengthen the production capability of domestic batteries,” said SK On CEO Jee Dong-sub. “Based on the aggressive investment, we will contribute to the local economy and try to become a representative firm that leads the global market.”
The expansion at the Seosan site is expected to create over 800 jobs.
SK On’s global annual production capacity stands at 89 GWh with overseas production sites in China, Hungary and the United States. The company is adding more production capabilities in each country.
By Kan Hyeong-woo(hwkan@heraldcorp.com)
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