Who Are the "Je2 Geumyang"... The Players Betting on Battery Materials

STX Expands Core Lithium and Nickel Material Business
All-Solid-State Electrolyte R&D Donghwa Enterprise

STX Holdings Co., Ltd., the holding company of STX, which rose to 13th place in the Korean business world based on the shipbuilding industry, and Dongwha Enterprise, the nation's top wood company, share a commonality. Both are dreaming of a second leap forward by entering the battery materials business. Companies across various industries are jumping into the battery business in search of new business opportunities.

STX's core business division is its general trading company. It operates in raw material import and export, energy, shipping, and logistics businesses. As of last year, the raw material import and export business accounted for 562 billion KRW, making up 64% of total sales. The energy business (sales of thermal coal and petroleum) was 190 billion KRW, the machinery engine business 86 billion KRW, and the shipping logistics business 34 billion KRW.

STX is expanding its battery core materials business such as lithium and nickel based on its know-how in raw material import and export through its general trading company. The nickel business has come to light after about 20 years. Since investing in the Ambatovy mine in Madagascar, one of the world's top three nickel mines, in 2006, STX has accumulated nearly 20 years of business experience and know-how. It holds shares in the Ambatovy mine in Madagascar, which has nickel reserves of about 150 million tons, and achieves annual sales exceeding 300 billion KRW.

To secure additional supply chains, STX chose Indonesia and decided to establish a local joint venture there in April. It also acquired a 20% stake in a nickel mine in the Sulawesi region of Indonesia, aiming to start production in the first quarter of next year.

In June, STX signed a Memorandum of Understanding (MOU) with China’s lithium producer, Yingde Lithium Battery, focusing on lithium production and sales. STX plans to establish an integrated process from salt lake lithium extraction to concentrate, refining, and lithium hydroxide production, aiming to take the lead in the lithium material 'upstream' sector.

Along with its new growth strategy, STX is also restructuring its existing businesses. It is spinning off its logistics and shipping business into a separate entity (STX Greenlogis), thereby separating its global trading business and logistics/shipping business. An STX official explained, "The business structure reorganization through the spin-off will enhance professionalism and efficiency."

The STX Group, once led by former chairman Kang Deok-soo from Ssangyong Group, was dismantled after failing to overcome the downturn in its main shipbuilding industry. STX Holdings Co., Ltd. was acquired by the Chinese investment company APC Mercury in 2018 and successfully transformed into a specialized trading company.

Dongwha Enterprise, which started as a sawmill in 1948 and grew into a leading domestic wood company, is also attempting to transform into a battery materials company. In 2019, it entered the electrolyte manufacturing business by acquiring a 90% stake in Panax Etec (now Dongwha Electrolite) for 117.9 billion KRW. Electrolyte is considered one of the four core materials of secondary batteries, along with cathode materials, anode materials, and separators.

In 2019, Dongwha Enterprise established a chemical business division and was selected as a national project company for research on electrolytes for all-solid-state batteries. It has completed the development of lithium secondary battery electrolyte compositions applied with next-generation high-capacity cathode active materials (NCM811) and has also completed verification by major battery manufacturers.

Seung Myung-ho, the second-generation founder and chairman, emphasized in his New Year's address earlier this year, "This year must be the first year for Dongwha Electrolite to establish itself as an irreplaceable leading company in the global battery market. The chemical business group, including electrolytes, must clearly prove that it is Dongwha's second growth engine."

Among companies that entered the battery business earlier and attracted public attention, Kumyang is a representative example. Kumyang, which holds 30% of the global foaming agent market, began to attract market attention last March by adding "battery and materials development, manufacturing, and sales" to its business objectives. It further established itself as a battery-related stock by disclosing investments in lithium mine shares in Mongolia and Congo.