Setopia announced on the 13th that it has acquired shares in KCM Industry, which possesses neodymium permanent magnet powder (NdFeB) production technology, to facilitate the smooth progress of its rare earth permanent magnet business.
Through this contract, Setopia will acquire 61.65% (12,330 shares) of KCM's total issued shares. Approximately 31.4% (6,280 shares) of the first purchase shares will be acquired on the contract date, and about 30.25% (6,050 shares) of the second purchase shares will be acquired by the end of March next year. The total capital for the share acquisition is approximately 7.4 billion KRW.
KCM is a company that produces and supplies neodymium permanent magnet powder (NdFeB) using rare earth NdPr oxide as the main raw material, with an annual production capacity of about 240 tons. Last year, it recorded sales of 20.15 billion KRW, gross profit of 3.357 billion KRW, and operating profit of 2.87 billion KRW. The international market price of neodymium metal is currently traded at USD 94,000 (approximately 120 million KRW) per ton.
The neodymium permanent magnet powder produced by KCM Industry is supplied and exported in various forms as neodymium permanent magnet components essential for electric vehicles such as Hyundai and Kia through domestic and overseas permanent magnet manufacturers, as well as to overseas home appliance manufacturers including LG Electronics.
To increase production capacity, it was announced that Setopia has agreed to complete the first additional facility expansion within the year through additional facility investment, expanding production to 480 tons.
A Setopia official stated, “Starting with the acquisition of shares in KCM, which has a domestic production base for neodymium permanent magnet powder (NdFeB), an essential material for bonded permanent magnets, one of the production methods of rare earth permanent magnets, we have established a domestic value chain for rare earth permanent magnets that does not rely on China by prioritizing the supply of NdPr oxide to KCM through a domestic joint venture with Vietnam VTRE, securing a stable supply of NdPr oxide based on Vietnamese raw ore.”
He added, “We also plan to closely cooperate with KSM, which produces domestic NdPr metal and alloys. Additionally, as regular supply requests for NdPr oxide continue to come from various permanent magnet manufacturers in Japan, Europe, and other regions, the favorable environmental conditions as a supplier of rare earth materials amid US-China conflicts are expected to lead to continuous sales and profit growth in the future.”
With two stages of the rare earth permanent magnet value chain completed through VTRE and KCM, Setopia intends to complete the domestic neodymium permanent magnet value chain by continuously promoting the remaining planned business stages.
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