What Kind of Company Is Hwaseong's 'Arisel' Involved in the Large-Scale Fire Incident?

Primary Battery Production... Esconec Subsidiary
Last Year's Sales 4.79 Billion KRW, Net Loss 7.3 Billion KRW

The Arisell factory, where more than 20 people have died or gone missing due to a fire that occurred on the morning of the 24th, is located in Jeongok Marine General Industrial Complex, Seosin-myeon, Hwaseong-si, Gyeonggi-do. The Jeongok Marine General Industrial Complex serves as a rear industrial complex for Jeongok Port, which is 4 km away.

Arisell is a subsidiary of Esconec, a KOSDAQ-listed company that produces metal processing parts for various information technology (IT) products such as smartphones and laptops. It was launched in May 2020 through the business transfer of Esconec's battery division. The main product is primary lithium batteries. These are mainly used in smart meters for intelligent power grids (smart grids).

The scene of the fire at Arisel Factory located in Seosin-myeon, Hwaseong-si, Gyeonggi-do, where more than 20 people were reported dead or missing on the 24th. [Yonhap News]

The Arisell Hwaseong factory is a reinforced concrete structure with a total floor area of 5,530㎡. It was completed in April 2018, and it is understood that about 35,000 finished lithium batteries were stored there.

Lithium-ion batteries are mostly used in electronic devices and electrical equipment. Lithium-ion batteries are used in electric vehicles, mobile phones, laptops, and energy storage systems (ESS). Battery fires are difficult to extinguish with the usual method of spraying firefighting water. Hundreds of degrees of heat continue to be generated inside, causing flames. Also, when a fire breaks out, a large amount of hydrofluoric acid gas is produced, making it difficult for firefighting personnel to enter the building.

However, the batteries stored in the Arisell factory that caught fire that day are mostly primary batteries. Primary batteries are batteries that are used once without recharging and then discarded, and they have a relatively lower fire risk compared to secondary batteries. However, lithium is highly reactive with air and heat, so even primary batteries can explode and cause fires if exposed to high temperatures or come into contact with water vapor. The consecutive explosion sounds heard in the early stages of the fire that day are likely due to this.

Since its launch, Arisell has been experiencing continuous business deterioration. According to the Financial Supervisory Service's electronic disclosure system, as of the end of last year, its liabilities amounted to about 23.869 billion KRW, approaching its capital of 25 billion KRW. The conditions were so poor that it was once in a state of capital erosion. The business structure is also such that losses increase with sales. Last year, the company's sales were 4.79088 billion KRW, while operating losses amounted to 2.64511 billion KRW. The net loss for the period reached 7.3104 billion KRW.