SK Innovation has decided to additionally invest 945.2 billion won (US$845.2 million) in a battery production factory in Hungary and spin off its material business unit in a bid to sharpen the competitiveness of its battery business.
The company’s board of directors approved its investment plan on Feb. 27. SK Innovation is building a 7.5 GWh electric car battery factory at its Komarom Factory 1 in Hungary for completion early next year. It is planning to build Factory 2 next to the first one.
SK Innovation’s production bases include one battery plant in Seosan, Korea, two in Europe, one in China and one in the United States. The latest investment decision will expedite the company’s strategy to secure a 60 GWh battery production capacity until 2022.
SK Innovation is expanding its influence over the global electric car battery market by supplying batteries to Volkswagen in Germany and pushing forward with the establishment of joint factories with European automakers.
As Samsung SDI decided to invest more than 500 billion won in its plant in Hungary earlier this year and LG Chem is planning to expand its plant in Poland, the three companies are expected to have fiercer competition in the European market.
SK Innovation will also begin to find future growth engine items by spinning off the material business unit. The unit was tentatively named “SK IE Materials Co.” and will be launched on April 1. Currently, SK Innovation is operating the transparent PI film business unit, which is the world's second largest. Transparent PI film goes into lithium ion battery separators (LiBS) and foldable displays. In particular, the business unit participated in the Mobile World Congress (MWC), which was held in Spain this month, after releasing Flexible Cover Window (FCW), a transparent PI product, at the World Electronics Show (CES) in Las Vegas in January.
According to the market research firm Strategy Analytics, global foldable phone sales will rapidly increase from 3.2 million units this year to about 50.1 million units by 2022, fueling demand for transparent PI film, which is a key component of foldable phones.
The spin-off of the material business unit will increase the number of SK Innovation’s subsidiaries to six. Its existing subsidiaries are SK Energy, SK Global Chemical, SK Lubricants, SK Incheon Petrochemical, and SK Trading International. After the spin-off, SK Innovation will focus on the EV battery and oil development businesses.