SK Nexilis launches copper foil production in Malaysia

KOTA KINABALU, Malaysia – South Korea’s SK Nexilis Co., the world’s largest copper foil maker, started commercial production at its first overseas factory in Kota Kinabalu, Malaysia on Oct. 23.

The new facility boasts the world's largest production lines of copper foil, a core material of rechargeable batteries, with the most diversified types of products.

It is one of the twin plants SK Nexilis, a subsidiary of chemical materials maker SKC Ltd., has been building in the city of Malaysia. The facility is capable of producing the world’s longest, thinnest and widest copper foil.

The second one is scheduled for completion in the second quarter of next year, with its construction about 80% finished.

SK Nexilis produces copper foil as thin as 4 micrometers (㎛), or 4 millionth of a meter. That is just one-fifth the thickness of clear food wrap used at home.

Copper foil is a thin foil that surrounds the anode, the negative end of a lithium-ion battery.

The two plants are located on a 162,700-square-meter site, the size of 23 soccer fields.

On Nov. 1, visitors to the factory had to wear dustproof clothing, masks and hats at the entrance, as if entering a semiconductor factory. 

Inside the factory, copper foil was made and then wound on large drums, like steel plates being produced in a steel mill.

The copper foil is 1.4 meters wide and 77 kilometers long, the widest and longest of its kind in the world.

A roll of copper foil produced there weighs 7 to 8 tons, with nearly 100 of these rolls piled up.

“Products that have undergone inspection are packaged for shipment to customers,” said Kim Gwang-sun, head of engineering at SK Nexilis’ Malaysia unit.

“The first shipment in this plant is now crossing the Atlantic Ocean to go to customers in North America.”

The Malaysian plant was initially supposed to have an annual capacity of 50,000 tons, but SK decided to increase it to 57,000 tons. SK has spent 900 billion won ($690 million) to build the two plants there.

Plentiful electricity and investment incentives were key to SK Nexilis' decision to choose Kota Kinabalu, a popular holiday destination in Southeast Asia, as the location of its first overseas plant.

Its two plants will use almost half of the electricity supplied in Sabah, the state where Kota Kinabalu is located.

The Malaysian and Sabah state governments agreed to significantly lower electricity rates for SK Nexellis and use 100% renewable energy for the supply. In addition, they exempted SK from corporate tax for several years.

The electricity bill to operate the factories 24 hours a day is less than half that of its main production facilities in Jeongeup, South Korea.

Global demand for copper foil for secondary batteries is predicted to grow rapidly from 490,000 tons this year to 1.43 million tons in 2028 and 2.07 million tons in 2030.

SK Nexilis has been expanding production capacity at home in fierce competition with Chinese players, raising concerns about oversupply in the sector.

“We’re No. 1 in terms of technology and market share in the copper foil industry, but we cannot survive the competition with Chinese companies unless we lower costs,” said Shin Dong-hwan, head of SK Nexilis Malaysia.

“This Malaysian plant is more cost-competitive than any other plant in the world. That will help us receive more orders,” he said.

POLAND

SK Nexilis is scheduled to complete its second overseas production lines in Stalowa Wola Count, Poland next year. It will have an annual capacity of 57,000 tons, slightly higher than its domestic capacity of 52,000 tons.

In aggregate, the company will be able to produce more than 160,000 tons of copper foil from next year.

Write to Jae-Fu Kim at hu@hankyung.com
 


Yeonhee Kim edited this article.