Korea’s Samyoung shifts focus to EV, battery materials

Samyoung’s thin films [Photo by Yang Yeon-ho]

Samyoung Co., South Korea’s only manufacturer of capacitor films, will shift focus towards producing materials for electric vehicles (EVs) and secondary batteries while exiting money-losing tetra pack business.

According to the company on Thursday, Samyoung signed a contract to sell its factory and site in Gumi, North Gyeongsang Province, for 12 billion won ($8.83 million), as it intends to discontinue milk tetra pack production.

With the proceeds from the sale, along with the income generated from the sale of accounts receivable and infrastructure, Samyoung has secured approximately 15 billion won.

The company has been reporting operating losses exceeding 200 million won every month in tetra pack business.

Combined with other loss-making ventures, such as polyethylene wraps and non-flammable polypropylene films, the company recorded an operating loss of 4.8 billion won last year.

According to Samyoung, the latest sale is expected to result in a special profit of about 8 billion won.

The company plans to use the profit for financial restructuring, as well as to secure growth momentum for its new business, including revamping existing production lines and expanding new production lines.

The company has been grappling with loans incurred during the recent expansion of the capacitor film production lines.

Capacitor film is a critical material for electronics and has been experiencing a severe global supply shortage due to its recent use in electric vehicle inverters.

Production of these films, with their required thinness, demands significant technical expertise, resulting in a high barrier to entry.

Consequently, the global market has been dominated by Japan’s Toray Group and Oji Paper Co.

Samyoung currently holds a 10 percent market share, making it the third-largest player globally.

In particular, the thin capacitor film used in eco-friendly vehicles is also expected to face a supply shortage.

Samyoung plans to start operating new production lines to manufacture films in various thicknesses. Within this month, the company plans to produce sample products in the 3 micrometer range, starting with 3.5μm, and 2.3μm and 2μm sample products next month, with the aim of supplying them to domestic and international markets.

Samyoung is also conducting tests on sample film products used for wrapping electrodes, providing them to domestic secondary battery manufacturers.

According to industry sources, thin films for secondary batteries are known to generate higher margin.