Expansion of Domestic and International Precursor Production Capacity to 210,000 Tons by 2027 through KOSPI Listing
Ecopro Materials plans to secure a production capacity of 210,000 tons by 2027 through its listing, aiming to become a global precursor material manufacturing company.
On the 25th, Ecopro Materials submitted a securities registration statement to the Financial Services Commission and initiated the public offering process for listing on the KOSPI market. The total number of shares to be offered is 14,476,000, with a desired offering price per share ranging from 36,200 KRW to 46,000 KRW. If the offering is successfully completed, Ecopro Materials will secure investment funds between 524 billion KRW and 665.9 billion KRW.
Establishing a Foundation to Strengthen ‘K-Battery’ Competitiveness through Increased Precursor Material Self-Sufficiency
Ecopro Materials is currently the only company in Korea that mass-produces precursor materials.
Precursor materials are refined by mixing minerals such as nickel, cobalt, manganese, and aluminum in specific ratios as raw materials for cathode active materials. Precursor materials account for 20% of battery costs and 70% of cathode material costs. When lithium is added to precursor materials, cathode active materials are completed. The synthesis technology of precursor materials determines the price and quality of cathode materials and influences battery characteristics such as energy density, lifespan, and stability. Ultimately, securing competitiveness in precursor materials is a core issue in secondary batteries beyond just cathode materials.
This also lends credibility to the analysis that Ecopro Materials’ listing will drive ‘K-Battery’ competitiveness beyond Ecopro itself.
The precursor material process at Ecopro Materials is broadly divided into two: CPM (Cathode Precursor Material production process) and RMP (Raw Material Precipitate, sulfuric acid process). RMP is a process that extracts high-purity nickel and cobalt by adding sulfuric acid to low-purity raw materials. Previously, the cost was high because high-purity raw materials were imported directly.
However, Ecopro Materials developed the RMP process, importing low-purity nickel mixtures cheaply and refining them, thereby increasing the added value of precursor materials. Currently, Ecopro Materials produces 50,000 tons of precursor materials annually at its Pohang CPM plants 1 and 2, and plans to increase production capacity about fourfold to 210,000 tons by 2027. In the second half of the year, plants 3 and 4 will begin construction, with plans to expand into North America and Europe in the future.
The listing of Ecopro Materials is expected to serve as a turning point to increase precursor material self-sufficiency. By 2027, high-nickel precursor production capacity is expected to be 410,000 tons at GEM, 403,000 tons at CNGR, and 250,000 tons at Huayou Cobalt, all Chinese precursor companies. Ecopro Materials is expected to hold 210,000 tons, accounting for 7.5% of the total market. Excluding China, Ecopro Materials is projected to capture 18.1% of the market. Currently, most precursor materials produced by Ecopro Materials are supplied to its affiliate Ecopro BM, but it plans to diversify customers and expand external sales in the future. Funds secured through the listing will be used not only to expand production lines but also to strengthen investment in next-generation precursor research and development to maintain technological leadership in precursor materials.
Precursor Material Business, Once Suspended, Seizes Revival Opportunity through Ecopro Materials’ Listing
Ecopro first connected with secondary battery cathode materials in 2004. It began by jointly participating with Cheil Industries in the government-commissioned ‘Ultra-high Capacity Lithium-ion Battery Development Consortium.’ Cheil Industries developed cathode materials, Ecopro developed precursor materials, and supplied them to the cell company Samsung SDI.
In 2006, Cheil Industries restructured and exited the battery materials business, which Ecopro then acquired. Ecopro began to generate synergy by simultaneously operating cathode material and precursor material businesses and significantly expanded the precursor business from 2009. As precursor supply to a major domestic conglomerate increased, Ecopro greatly expanded its production lines through bank loans.
However, Japanese competitors launched a price war to push Ecopro out of the market, leading Ecopro to suspend its precursor business and focus on strengthening cathode material technology. As a result, Ecopro turned the crisis of suspending the precursor business into an opportunity by supplying cathode materials to Sony for testing in 2013 and later supplying NCA cathode materials for power tool batteries to Samsung SDI.
Since then, Ecopro has produced small quantities of precursor materials used by Ecopro BM and imported most from Chinese companies like GEM. Recognizing the importance of the precursor business, Ecopro acquired the Chinese stake in the joint venture Ecopro GEM. Since 2017, it has started its own technology development and line construction and is now preparing for listing.
Kim Byung-hoon, CEO of Ecopro Materials, stated, "Ecopro Materials has established its own value chain from raw material procurement, precursor production, to final customers, driving high growth. As the only non-Chinese precursor company in Korea, we expect to benefit greatly from regulatory changes such as the U.S. Inflation Reduction Act (IRA) and the European Critical Raw Materials Act (CRMA). Through continuous customer diversification, we will grow into a global precursor material company."
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