[Asia Economy Reporter Hwang Yoon-joo] SK Nexilis, an investment company of SKC specializing in copper foil manufacturing for electric vehicle batteries, is establishing its first overseas production base in Malaysia and will be the first in the industry to implement RE100. Boasting the world's top technology in copper foil manufacturing for batteries, SK Nexilis will consolidate its accumulated know-how to build the best copper foil factory here.
On the 26th, SK Nexilis selected the KKIP industrial complex in Kota Kinabalu City, Sabah State, Malaysia, as the site for its first overseas expansion at a board meeting. SK Nexilis plans to invest approximately 650 billion KRW to build a production base with an annual capacity of 44,000 tons. Construction is scheduled to begin in the first half of the year, aiming for commercial operation in 2023. This will triple SK Nexilis's current production capacity to 100,000 tons.
Notably, this site will fully implement RE100 by using 100% renewable energy for its power consumption, a first in the industry. This is to strengthen ESG management and proactively respond to global major customers' requests to increase the proportion of RE100 materials. SK Nexilis's parent company SKC and six other SK Group affiliates recently became the first in Korea to join RE100 and are actively promoting it.
Malaysia is advantageous in terms of power supply, which is crucial for copper foil manufacturing. Since copper foil is produced by electroplating copper onto titanium drums, large-scale electricity is required for manufacturing. Malaysia offers the most stable power supply among Southeast Asian countries, with prices about half of those in Korea, making it very cost-effective. Additionally, it is environmentally friendly due to a high supply of renewable energy such as hydropower.
Among these, Kota Kinabalu is the optimal region for SK Nexilis's first overseas production base. Located in the northern part of Borneo Island, Kota Kinabalu is the capital of Sabah State and offers the lowest power costs and stable supply among candidate sites. It has ports and a large international airport necessary for exports, as well as excellent infrastructure including gas and water. The available site area is 400,000 square meters, three times larger than the Jeongeup plant, allowing significant future expansion.
SK Nexilis will integrate world-class technology and know-how to introduce automated facilities here. This year, SK Nexilis improved productivity by introducing unmanned transport vehicles and robots and upgrading equipment at its fourth plant, which began commercial operation. Based on the experience of operating the fourth plant, SK Nexilis will upgrade the fifth and sixth plants and incorporate their know-how into the Malaysian site to build a world-class smart factory-level copper foil production facility.
SK Nexilis is also considering follow-up investments targeting Malaysia, Europe, and the United States to quickly respond to the rapidly growing market. According to SNE Research, the electric vehicle market is expected to grow at an average annual rate of 41% and the battery market by 38% until 2025. Demand for copper foil is also increasing, and SK Nexilis is currently operating at 100% capacity. With additional investments, SK Nexilis plans to rapidly expand production capacity to more than five times the current level by 2025.
Kim Young-tae, CEO of SK Nexilis, said, "We will build production facilities that match our top technology of producing the world's thinnest battery copper foil in the longest and widest form, and recipe technology that manufactures various products according to customer requests." He added, "By entering Malaysia, we will secure cost competitiveness, strengthen ESG management by implementing RE100, and accelerate global expansion through additional investments to solidify our position as the global No.1."
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