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EV material

POSCO Chem to build anode factories in EU, US from 2022

Apr 18, 2021 (Gmt+09:00)

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The area of the company's Gwanyang plant site is equivalent to 20 soccer fields.
The area of the company's Gwanyang plant site is equivalent to 20 soccer fields.

POSCO Chemical Co., the secondary battery materials unit of POSCO, plans to ramp up its anode production by building new plants in Europe and the US in addition to its recent plant expansion in South Korea.

The Korean chemicals maker is aiming to have the world's largest annual production capacity of anodes, a key material used in electric vehicle (EV) batteries, with 270,000 tons by 2025 versus the current capacity of 40,000 tons.

The global anode market is marked by a sharp supply shortage due to rising demand  from major battery makers around the world. Anodes take up around 40% of the manufacturing cost of EV batteries.

While the global market is led by Belgium’s Umicore and Japan’s Sumitomo and Nichia, none of them holds more than a 10% share of the market. POSCO Chemical says it will lead the market by 2030 with a 20% market share.  

POSCO Chemical started its anode materials business in 2012, building its first plant in 2018 in Gumi, 200 km southeast of Seoul. It has further built two anode production plants in Gwangyang, 300 km south of the capital city, in 2019 and 2020.

The company also initiated the construction of its third and fourth plants in Gwangyang, respectively, in October of last year and in February of this year.

The first two plants in Gwangyang will produce N65 products, whereas the latter two will be producing N85 products. The number following “N” stands for the percentage of nickel content; higher content offers a longer mileage range.

POSCO Chemical plans to build overseas production plants starting from 2022 in key regions including Europe and the US, according to a company source.

“We will be ramping up our production capacity much faster than our original plan, as the global EV market is growing rapidly,” said Chung Dae-hun, head of the energy materials business unit at the company.

The overseas facilities will enable POSCO Chemical to set up a global supply chain in step with the global EV makers that are building regional supply networks. By 2025, POSCO Chemical will produce 110,000 tons of anodes outside Korea and 160,000 tons within the country.

“We secured enough funds to build production plants outside Korea. POSCO Chemical will confirm global investment plans within this year,” added Chung.

 GLOBAL PRODUCTION PLANS

In January of this year, POSCO Chemical raised 1.27 trillion won ($1.13 billion) through a rights offering. The company is expected to start constructing its Europe and US plants simultaneously, after its internal review process regarding the global production plan is completed.

Analysts say that the company is likely to build its Europe plant in Poland, near LG Energy Solution Ltd.’s battery plant. POSCO Chemical is projected to build its US plant near a battery manufacturing plant as well.

Since 2020, POSCO Chemical supplies its anodes to Ultium Cells LLC, a battery-making joint venture between General Motors and LG Chem Co.

SMART FACTORY SYSTEM
 
While the company’s Gwangyang factory site is sized at 165,203㎡, large enough to build 20 soccer stadiums, it only has around 80 employees due to a high degree of automation and smart manufacturing.

Every stage of the anode production except the final packaging is done by machines. The site’s labor cost compared to that of its Gumi factory is only one third, while its annual capacity stands at three times that of Gumi's, with 30,000 tons compared to Gumi’s 10,000 tons.

Thanks to the smart factory system implemented at the Gwangyang plants, the manufacturing process from the insertion of raw materials to the final production takes only 48 hours compared to several days previously. The smart factory system adopts POSCO Group’s capabilities in manufacturing, construction and ICT.   

POSCO Chemical will also raise the internalization rate, the portion of the material produced in-house, of precursors from the current 20% to around 60% by 2025. The precursor is a material created by mixing nickel, cobalt and manganese, and is added to lithium to make anodes.  

“Together with our parent company POSCO, we will be a global leader in the segment by building a raw material value chain, securing advanced technologies and investing to expand our mass-production capabilities,” said POSCO Chemical CEO Min Kyung-joon.

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

Daniel Cho edited this article.

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