LG Chemicals is going to strengthen its value chain in battery material field through copper foil business.
LG Chem announced on May 16 that it will invest about 40 billion won in China's Jiang DeFu Technology (DeFu), which manufactures copper foil, a key component of secondary batteries.
Copper foil is a thin copper plate about one-fifteenth the thickness of the hair. It is a key material for electric vehicle batteries that allow electric current to flow.
The thinner the thickness, the more substances can be filled into the cathode to increase battery capacity. Demand is expected to increase rapidly due to the explosive growth of the battery market.
DeFu is the third-largest Copper foil manufacturer in China based on production capacity last year and is producing Copper foil for secondary batteries and Copper foil for electronic printed circuit boards (PCBs).
It currently has an annual production capacity of 4.9 million tons and plans to expand its production capacity to 7.8 million tons by 2022. Its first quarter sales were about $100 million, more than quadrupling year-on-year.
LG Chem will also sign a Memorandum of Understanding (MOU) with DeFu to establish a long-term cooperative partnership in the Copperfoil project and discuss various cooperative measures on the project.
Analysts say that LG Chemicals' investment will not only strengthen its portfolio of battery materials based on its global business network but also secure capabilities in its new material business in the cathode field through strategic investments.
"We will strengthen our value chain through cooperation with global companies in battery material field," said Nam Chul, executive director of LG Chem's high-tech materials division. "We will lead the battery material market by increasing competitiveness of existing businesses and capabilities of new businesses."
Meanwhile, according to Hana Financial Investment, global demand for Copper foil for secondary batteries is expected to grow 25% annually from 260,000 tons this year to 620,000 tons in 2025.
