Progressive companies need support
The secondary battery industry is an emerging energy business that had an annual growth rate of 47.2 percent during the past five years.
One of the most critical factors behind L&F Material’s success was the timely selection of products and the insight to foresee the potential of the secondary battery market.
Started ion 2005, L&F Material connected local research institutes and universities with new material engineers in Japan.
The company commercialized the nation’s first nickel-cobalt-manganese (NCM) cathode active material. This new material replaced the market’s flagship cobalt cathode active material and propelled L&F Material to become one of the leading players in the world lithium-ion secondary battery market.
Another success factor is the expanding renewable energy market, as natural resources that have sustained the primary energy industry are quickly being depleted.
For example, electric vehicles powered by secondary batteries are emerging as a main means of future transportation.
L&F Material has mainly developed and produced electronic devices like mobile phones, but following the market trend the company is now focusing its research and development resources on mid-size and large batteries that will be used in electric cars. The company recently exported its technology to a Japanede battery maker.
The final success factor is the CEO’s wholehearted support, which was also very timely.
L&F Material is a technology-oriented company, of which about 20 percent of employees are engineers. In line with the staff composition, investments have been mostly made toward fostering its growth foundation rather than expanding short-term profit.
Thanks to rich resources for R&D, the company commercialized new materials in joint development projects with top-tier customer battery makers from Korea and elsewhere.
Expansions of its production facilities also followed.
Of course, it is true that Chinese competitors recently have grown due to state-led support of future industries. Also, there is the whole industrywide pressure to drop prices in an effort to expand the industry.
However, I don’t think these factors will hinder L&F Material, considering its past technology power and market-friendly resilience.
In a bid to grow more companies like this, I think the Korean government needs to act more quickly in rolling out policies to nurture the electric car industry and related industries.
By KIM HYUNG-GYUN IBK PRINCIPAL CONSULTANT
with the Korea JoongAng Daily
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