Samsung SDI, the battery-making unit of Samsung Group, is said that it plans to set up its European battery production plant in Hungary, constructing a three-legged production line connecting Korea with China and Europe.
According to industry sources on August 24, Samsung SDI has decided to build its battery production plant in Europe in order to target the local market, and the company is currently discussing construction plans and incentives with the Hungarian government.
The investment figure is likely to reach hundreds of billions of won. Samsung SDI has planned to invest a total of 974.6 billion won (US$868.24 million) in the battery business sector this year and spent 303.9 billion won (US$270.73 million) in the first half of the year. The detailed investment plan is expected to come out as early as next month and by the end of the second half of the year at the latest.
However, Samsung SDI said, “We are in talks over the establishment of the plant with the Hungarian government but we haven’t decided on specific investment figures and exact time yet.”
Samsung Display has its plasma display panel factory in Hungary which has been shut down since 2007. Industry watchers think that the company can reduce the time and cost for the construction when making use of the plant. In addition, it is geographically close to Austria in where Magna Steyr, the battery pack manufacturer acquired by Samsung SDI last year, is located.
In particular, Hungary is also geographically close to Germany in where global leading automakers are headquartered. Samsung SDI has been supplying batteries to the Germany-based BMW Group since 2009 and the company also agreed with the Germany-based Audi in August last year to jointly develop electric sport utility vehicles (SUVs). On this account, Germany was mentioned for the location of its planned European plant.
An official from the business industry said, “Now that LG Chem has decided to build an electric vehicle (EV) battery manufacturing plant in Poland within September, Samsung SDI has no choice but to scramble to establish its local plant in a bid to target the European market.”