EcoPro – the parent company of local battery cathode maker EcoProBM – is creating a joint venture (JV) in China to secure a stable source of the precursor, a key ingredient for battery cathode.
The JV will be with Fuan GEM, an affiliate of China’s GEM, according to GEM on April 13. The JV will be established in Fu’an City of Fujian Province.
The JV will handle producing precursor for high-nickel cathode. EcoPro will hold 49% in the firm, while Fuan GEM holds the rest. The exact amount of the investment has yet to be publicized, while the details will be finalized before June, 2020.
The JV in China will aim to produce up to 24,000 tons of the precursor material in 2022 and 48,000 tons in 2024.
This marks the first time for EcoPro to create a JV overseas. In Korea, it has a precursor manufacturing unit called EcoPro GM. It also operates a cathode JV with Samsung SDI called EcoProEM as a part of its lineup for battery manufacturing that includes EcoPro Innovation and EcoPro C&G that are responsible for the entire process from material production to recycling.
The reason behind the latest JV lies in the expansion plans harbored by EcoPro BM, which will be adding new facilities CAM5-N and CAM6 in Pohang to supply cathode to clients SK Innovation and Samsung SDI. Each is expected to have an annual production capacity of 26,000 tons and 70,000 tons. Including the existing CAM4 and CAM5 plants, it is aiming to churn out an annual 180,000 tons of cathode by 2023.
As a part of such plans, EcoPro decided in December 2019 to spend KRW 78.5 billion to allow EcoPro GEM to directly process precursor material. To cut costs, EcoPro also recycles about 2% of the dust created from producing cathode in efforts to cut costs.
“We will continue on the path to cut costs to stay competitive to ultimately become one of the leading companies in the sector for producing cathode,” said a company official.
The Elec is South Korea’s No.1 tech news platform.