[Exclusive] Aluco Pursues Contract Agreements with LG and SK

Received Letter of Intent from LG Recently... Secured Orders Worth 200 Billion KRW
Negotiating 250 Billion KRW Contract with SK... Revenue Stream to Begin This Year

[Asia Economy Reporter Lee Seon-ae] Aluco, a specialized company in aluminum material parts, is in the process of negotiating supply contracts with LG Chem (LG Energy Solution) and SK Innovation.

According to related industry sources on the 10th, Aluco has signed a supply contract worth 200 billion KRW with LG Chem for 'battery pack housing and cell covers' and is expected to soon announce the related contract disclosure. It has been confirmed that LG Chem recently sent a letter of intent to Aluco.

Regarding this, an Aluco official stated, "It is true that we received a letter of intent from LG," but added, "However, we cannot confirm the contract scale, contract finalization, or disclosure status beyond that."

Battery pack housing and cell covers are core components designed to protect the cells of electric vehicle batteries. Aluminum materials, known for their excellent thermal conductivity, are mainly used to dissipate heat. Aluco carries out these processes using advanced technologies such as precise aluminum extrusion and processing. Aluco is the only domestic company that internalizes all processes from mold production to casting, extrusion, processing, and assembly using aluminum. Aluco's aluminum covers, produced through extrusion mold methods, are evaluated to have superior durability compared to conventional plate covers.

In line with the global rapid growth trend of electric vehicles, Aluco has selected the electric vehicle battery pack housing and cell cover sector, which uses ultra-lightweight component materials, as a new growth engine business and is actively pursuing market expansion. Previously, in August last year, Aluco secured buyers through 'basic contracts' with LG Chem and SK Innovation, entering the electric vehicle battery parts market. A basic contract is an agreement that sets out various conditions for transactions and orders related to parts supply contracts.

Currently, Aluco is also negotiating a supply contract worth 250 billion KRW with SK Innovation. Although the contract has not been finalized yet, it is expected to proceed smoothly. SK Innovation stated, "We have not yet signed the final contract."

Recently, with the sharp rise in aluminum prices, secondary battery companies also appear to be rushing to finalize contracts. The contracts reportedly adopt a markup method that compensates for fluctuations in raw material prices.

If all contracts are finalized, the total scale will be 450 billion KRW, which is similar to Aluco's consolidated sales of 492.5 billion KRW last year. This means that from this year, battery covers for electric vehicles will become a major source of revenue for Aluco.