Strategic Decision to Expand Overseas Markets for Eco-Friendly EV Battery Materials in the US and Europe
Maximizing Synergy in Battery Material Business
[Asia Economy Reporter Choi Seoyoon] Lotte Chemical completes the value chain of key secondary battery materials through the acquisition of copper foil manufacturer Iljin Materials.
Lotte Battery Materials USA Corporation, a battery materials holding company of Lotte Chemical in the United States, announced on the 11th that it has signed a stock purchase agreement worth 2.7 trillion KRW (53.3% stake) to acquire Iljin Materials, the No. 1 domestic copper foil producer (based on 2022 production capacity).
Lotte Battery Materials USA is a U.S.-based battery materials holding company wholly owned by Lotte Chemical. It took the lead in the acquisition to create synergy for expanding overseas markets for eco-friendly electric vehicle battery materials in the U.S., Europe, and other regions.
Iljin Materials is a major domestic copper foil manufacturer operating production bases in Korea and Malaysia with a production capacity of about 60,000 tons. It plans to build factories with a capacity of 230,000 tons by 2027 in Malaysia, Spain, and the United States.
The Malaysian plant secures stable cost competitiveness based on cheap electricity rates using large-scale hydropower and labor costs, while the Spanish plant is planned to be constructed as a production facility that meets customers' ESG management by using eco-friendly energy sources such as solar and wind power.
Kim Kyohyun, Head of Lotte Group's Chemical Division, said, "Iljin Materials has excellent technological capabilities, having succeeded in developing the world's first ultra-high-strength (90kgf/㎟) copper foil (Elecfoil)." He added, "Lotte Group's Chemical Division will do its best to enhance the business capabilities of the battery materials business through timely selection and concentration, and lead the improvement of value for the company, customers, and shareholders through organic collaboration among affiliates."
LOTTE Battery Materials USA Corporation signed the stock purchase agreement on the same day and plans to complete the acquisition after completing domestic and overseas corporate merger filings.
Iljin Materials posted sales of 388.5 billion KRW and operating profit of 46.8 billion KRW in the first half of this year. Stable cash flow is expected due to long-term supply contracts with leading domestic and foreign battery companies, and additional investments such as overseas production base construction are expected to proceed based on these internal funds.
From general-purpose copper foil products to high-strength, high-elongation high-value-added product lines that withstand the volumetric expansion of silicon anode materials, Iljin Materials is building a diverse product lineup and is attracting attention as a company with core technology and promising future growth potential.
Meanwhile, Lotte Chemical's battery materials business initially set a goal of investing a total of 4 trillion KRW by 2030 to achieve annual sales of 5 trillion KRW, but this acquisition is expected to enable early achievement of the goal and further expansion of sales scale. In July, it announced the construction of the first U.S. cathode foil production base with a capacity of about 36,000 tons, and with this acquisition of a copper foil manufacturer, it plans to grow into a global leading battery materials company by securing major markets in Europe and the U.S.
Lotte Group is actively investing in various battery materials businesses through companies within its chemical division. Lotte Chemical, Lotte Fine Chemical, and Lotte Aluminum are directly and indirectly investing in and producing the four major battery materials (cathode active materials, anode materials, electrolytes, separators).
Lotte Chemical is building a separator (PE) production and battery electrolyte organic solvent (EC, DMC) plant, while Lotte Aluminum and Lotte Fine Chemical are conducting cathode foil and copper foil (through equity investment in Solus Advanced Materials) businesses, respectively. Lotte Group plans to lead the future battery materials business by securing technology and establishing cooperative relationships among affiliates to derive various synergies.
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