LG Chem invests 40 billion KRW in equity of China's 3rd largest copper foil company

Namcheol, Executive Director of LG Chem (third from the left in the photo), and Ma Ke, Deputy General Manager (second from the right), are taking a commemorative photo at the equity investment signing ceremony. Photo by LG Chem

[Asia Economy Reporter Choi Dae-yeol] LG Chem announced on the 16th that it has invested 40 billion KRW to acquire shares in Chinese battery material company Jiujiang DeFu Technology (hereinafter DeFu).

DeFu is the third-largest copper foil manufacturer in China, producing battery copper foil for secondary batteries and copper foil for printed circuit boards (PCBs) used in electronic products. It has factories in Jiujiang City, Jiangxi Province, and Lanzhou City, Gansu Province. LG explained that the investment was made to strengthen the value chain in the battery materials sector.

Copper foil is a thin copper sheet about 1/15 the thickness of a human hair. It is used in battery anodes to conduct current and is considered a core battery material. The thinner the foil, the more active material can be loaded onto the anode, increasing battery capacity. The industry expects demand for copper foil for secondary batteries to grow from 260,000 tons this year to 620,000 tons by 2025, with an average annual growth rate of over 25%.

DeFu's current annual production capacity is about 49,000 tons, with plans to increase to 78,000 tons by next year. Its sales in the first quarter reached 113 billion KRW, reportedly more than quadrupling compared to the previous year. LG Chem stated, "Based on industry-leading cost competitiveness and production capacity, DeFu possesses technology capable of competing with global copper foil manufacturers. Among Chinese local companies, it is the only one that owns copper foil additive technology in-house, enabling the production of uniform, high-quality copper foil."

According to LG Chem, DeFu began supplying to global major battery companies last year and plans to list on the Shenzhen ChiNext market in the first half of next year. As LG Chem has decided to focus on nurturing its battery materials business, it expects synergy effects between the businesses. The two companies signed a memorandum of understanding (MOU) to establish a long-term cooperative partnership in the copper foil business and agreed to discuss various cooperation plans.

Nam Cheol, head of LG Chem's Advanced Materials Division, said, "We will strengthen the value chain by collaborating comprehensively with global companies in the battery materials field. We will lead the battery materials market by enhancing the competitiveness of existing businesses and the capabilities of new businesses."