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EV battery materials

SKC to spend $600 mn to build copper foil plant in Malaysia

By Jan 26, 2021 (Gmt+09:00)

SK Nexilis' copper foil production line
SK Nexilis' copper foil production line

South Korea’s SKC Ltd. will build its first overseas plant of copper foils in Malaysia for 650 billion won ($588 million), as the chemical materials maker of SK Group is aiming to boost its capacity for the key component of electric vehicle batteries by nearly fivefold by 2025.

At a board meeting on Jan. 26, SKC picked Kota Kinabalu, the capital city of the Sabah state on the island of Borneo, as the location of its first overseas plant. The company plans to gradually expand its global production base toward Europe and the US to meet soaring demand for the EV battery material.

SK Nexilis Co., fully owned by SKC, will be in charge of the plant operation in Malaysia. 

“By advancing into Malaysia, we will beef up our price competitiveness and then make additional investments to accelerate our global expansion,” SK Nexilis Chief Executive Kim Young-tae was quoted as saying by the company.  

The plant to be constructed will have an annual capacity of 44,000 tons and aims to be commercially operational from 2023. SK Nexilis will break ground for the construction in the first half of this year.

The Malaysian city's large-scale electricity generation facility, required to produce copper foils, and about half an electricity price compared to South Korea led SKC to choose the coastal city. Its export infrastructure such as the port and the international airport was another attractions. 

In South Korea, SK Nexilis has been running four plants in North Jeolla Province, southwest of Seoul. The domestic facilities have an annual capacity of 34,000 tons copper foils. It is now building two additional production lines in the province, its fifth and sixth plants, for completion by the second half of this year and early 2022, respectively.

Once the fifth and sixth production lines are completed, its production capacity will swell to 52,000 tons. Including the output from the Malaysian plant, its copper foil production capacity will treble to 100,000 tons per year.

The location of the new plant, Kota Kinabalu, is a popular destination for Korean tourists. It will be on the same island of Borneo as the copper foil plant run by its hometown rival Iljin Materials Co, but about 1,000 km north of the Iljin plant.

The distance between the two plants may calm concerns raised by Iljin about possible employee outflows from its facility. The medium-sized materials maker has already been running a copper foil plant in Sarawak, a Malaysian state on the island of Borneo, since January 2019. The two companies are South Korea's two leading battery copper foil makers.

Write to Kyung-Min Kang at kkm1026@hankyung.com

Yeonhee Kim edited this article.

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