EcoPro eyeing China's GEM for Indonesian joint venture

EcoPro plans to form a joint venture with China's GEM in Indonesia to enhance its EV battery material production, aiming for cost competitiveness amid possible prolonged market downturns.

EcoPro founder and former chairman Lee Dong-chae, middle, poses with the recipients of awards given to outstanding employees at the company's complex in Pohang, North Gyeongsang, on Oct. 22. [ECOPRO]

The founder of EcoPro, a Korean EV battery materials company, proposed establishing a joint venture in Indonesia with China’s Green Eco Manufacture (GEM) to expand its cathode materials production capabilities in the region. The initiative aims to help the company navigate EV market downturn that may persist for up to five years.

“To become a game changer in the secondary battery market, one should secure leadership in technology and cost competitiveness,” EcoPro founder and former chairman Lee Dong-chae said during a speech celebrating the company’s 26th anniversary at its complex in Pohang, North Gyeongsang, on Oct. 22. “By joining forces with China’s GEM to complete the value chain stack, from mining and smelting to recycling cathode materials, EcoPro could leap forward as a global leading company.”

GEM operates a smelter in Indonesia capable of producing 150,000 tons of nickel. The two companies believe establishing a joint venture could complete a full value chain from smelting to precursors and cathode materials and will achieve groundbreaking cost competitiveness. In March, the Korean manufacturer invested $11 million to acquire 9 percent stake in GEM’s nickel processing facility in Indonesia. The country is home to the world’s largest nickel reserves and a key material in the production of EV batteries, accounting for 22 percent of the world’s supply.

Lee addressed the current slowdown in demand due to the ongoing “EV chasm,” noting that the crisis is “unpredictable, whether it will last for three years or five years.

“Looking back, however, there was not a single day in the past 26 years of EcoPro’s journey without a crisis,” he reflected. “It was through turning crises into opportunities and choosing the future over complacency that we were able to develop into a major secondary battery company with 3,500 employees.”

EcoPro originated with one employee in 1998 at an office in Seocho District, southern Seoul. The company established its headquarters in Ochang, North Chungcheong, in 2002, and expanded its production site in Pohang.

In 2016, EcoPro spun off its cathode materials division to establish EcoPro BM. The cathode materials maker listed on the Kosdaq the following year and invested 2 trillion won ($1.5 million) to build a plant cluster in Pohang capable of producing 160,000 tons of cathode material annually.

The Pohang cathode battery complex currently houses six affiliates, EcoPro BM, EcoPro EM, EcoPro Materials, EcoPro Innovation, EcoPro AP and EcoPro CNG.

The company’s annual cathode production capacity grew to 190,000 tons in 2023 from 6,000 tons in 2016. The firm’s revenue, which was 60 million won in 1998, crossed the 1 trillion won mark in 2021.

It is currently in the process of building additional cathode plants in Hungary and Canada.

The Hungarian plant is set to begin operation in 2025 with an annual production capacity of 108,000 tons, enough to produce batteries for 1.35 million EVs per year. The Canadian plant will be operational in the first half of 2026 with annual capacity of 45,000 tons.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]