Samsung SDI Co. will hand over some of its cathode materials production lines to its subsidiary STM Co. and inject 150 billion won ($130 million) to speed up cathode material production consolidation and enhance internal supply chain.
The Korean battery maker will transfer its 109.7 billion won worth of cathode materials production lines and auxiliary facilities currently under construction at its Ulsan complex in Korea to STM, its wholly-owned subsidiary specializing in cathode materials business, according to its regulatory filing on Tuesday.
Samsung SDI will also inject 150 billion won into STM by acquiring the subsidiary’s new 15 million common shares to be issued next month. The fund is to be used for cathode material production equipment purchase and other operational needs, the company explained.
On Thursday, Samsung SDI shares gained 0.8 percent to close at 765,000 won. STM is not listed.
STM was initially set up as a 50/50 joint venture between Samsung Fine Chemicals Co. and Japan’s Toda Kogyo in 2011. It became Samsung SDI’s wholly owned subsidiary in 2015.
Samsung SDI has been beefing up its cathode material business by consolidating internal supply chains to optimize its electric vehicle battery making operation with reduced reliance on external suppliers. Cathode, one of the four main components in an EV battery cell along with the anode, electrolytes and separators, is responsible for around 40 to 50 percent of rechargeable battery production cost.
Together with STM, EcoPro EM will be in charge of stable supply of cathode materials for Samsung SDI. EcoPro EM is a joint venture established by Samsung SDI and local EV battery materials maker EcoPro BM Co. in February 2020. Samsung SDI holds a 40 percent stake in the JV.
The JV is currently building a plant for producing next-generation cathode materials. The new plant will go operational in the first quarter next year to annually churn out 31,000 tons of cathode materials, equivalent to 350,000 electric vehicles.
The cathode materials made by EcoPro EM will entirely go to Samsung SDI.
Samsung SDI is also accelerating efforts to develop advanced battery materials such as high-nickel NCA. It invested 808.3 billion won on R&D projects last year.
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