Lotte Chemical under South Korean retail giant Lotte Group will seek to build an electrolyte solvent factory overseas together with Sasol Chemicals, a North American operation of South African petrochemical firm Sasol Ltd. as part of its bid to expand electric vehicle battery materials business.

The two companies sealed a memorandum of understanding (MOU) to study the feasibility of a joint project to build and operate a plant to produce battery electrolyte solvents, key components of lithium-ion batteries for EVs, they announced on Monday. Upon the deal, Lotte and Sasol review Lake Charles in the U.S. state of Louisiana or the industrial city of Marl in northwestern Germany as a site for their new plant and choose one through their feasibility test.

Under the collaboration, Sasol will provide Lotte with the feedstock, while Lotte will use its ethyl methyl carbonate (EMC) and diethyl carbonate (DEC) technologies.

“The increase in battery demand is driving the rapid growth of demand for the key lithium-ion battery materials,” said Lee Young-jun, head of the battery materials business group for Lotte Chemical. “Lotte Chemical will lead the global battery materials market through speedy expansion of our battery materials business.”

Electrolyte solvent allows lithium-ion to move easily between the battery’s anode and cathode. It is a key material for the performance and durability of rechargeable batteries used in electric vehicles. Through the teamwork, the two companies will develop sustainable solutions, such as renewable energies, for carbon neutrality.

The latest move is part of Lotte Chemical’s long-term plan to lead the global lithium-ion materials market. Last month, the company unveiled a plan to invest 4 trillion won ($3.09 billion) by 2030 to achieve annual sales of 5 trillion won to leading the global battery materials market.

It has started the construction of a production base for EV battery solvents, such as high-purity ethylene carbonate (EC) and dimethyl carbonate (DMC). The new plant at its Daesan production complex will become operable in the second half of 2023. The firm also plans to bolster its membrane business, increasing annual production from the current 7,000 tons to 100,000 tons in 2030 for a targeted revenue of 230 billion won.

In January this year, Lotte Chemical invested 65 billion won into Standard Energy, a Korea-based firm that developed vanadium-ion batteries for the first time in the world, to acquire 15 percent of the firm’s shares to become the second-largest shareholder. Moreover, the firm signed a deal with an American battery startup Soelect to invest $200 million in a joint venture to build a factory for battery materials for use in electric vehicles in the U.S. by 2025.

Responding to surging demand for eco-friendly cars and renewable energy, Lotte Chemical has redoubled its effort in the battery materials area to fortify its footprints in the market.

Lotte Chemical shares were up 0.76 percent to 198,000 in the early trading on Tuesday.

By Park Yun-gu and Jenny Lee

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