Posco Future M looks to EV batteries to swell revenue

Posco Future M aims to up its revenue 13-fold to 43 trillion won ($32 billion) by 2030 through aggressively expanding its battery materials business.

Posco Future M CEO Kim Jun-hyung speaks at an event to announce the company's future business goal Monday in southern Seoul. [POSCO FUTURE M]

Posco Future M aims to up its revenue 13-fold to 43 trillion won ($32 billion) by 2030 through aggressively expanding its battery materials business.

The company also seeks to boost operating profit 20-fold to 3.4 trillion won, making the entity a top player in the global market with 1 million tons of cathode production capacity.

Cathodes are a major material in EV batteries, accounting for 40 percent of total battery costs.

These were just a few of the goals CEO Kim Jun-hyung announced during a press event for the company's future business strategies Monday.

Posco Future M is a battery materials maker 60 percent owned by Posco Holdings, which also holds 100 percent of steelmaker Posco.

"The Posco Group's future relies on battery materials, not steel," CEO Kim said during the event. "Our cathode production will grow to 1 million tons by 2030, while anode production will increase to 370,000 tons."

Posco Future M's current cathode capacity stands at 105,000 tons, second only to rival EcoPro BM and ahead of LG Chem.

EcoPro announced its plan to increase capacity by 710,000 tons by 2027, and by another 470,000 tons by 2028.

Of the 1-million tons of cathodes, about 695,000 tons will be made in Korea, while 240,000 tons will be made in North America and Europe. The remaining 65,000 tons will be produced in China and Indonesia.

"We are confident that we can achieve the goal as we have already signed deals with big names, and are in talks with other potential clients," Kim added.

Kim added that Posco Future M is also developing lithium iron phosphate (LFP) batteries, a cheaper alternative using LFP cathodes. China's CATL currently dominates 95 percent of the world's LFP battery market.

Kim said LFP cathodes will account for 15 percent of Posco Future M's 1 million tons of cathode capacity.

Posco Future M's major clients include Samsung SDI, LG Energy Solution and Ultium Cells, a U.S. joint venture between LG Energy and General Motors.

The company had an order backlog of 106 trillion won as of late July.

BY SARAH CHEA [chea.sarah@joongang.co.kr]