SK Innovation invests in battery businesses

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SK Innovation invests in battery businesses

SK Innovation on Thursday announced a plan to make a hefty investment in its battery-related businesses, the latest effort by the company to break away from its heavy reliance on oil.

The company announced on Thursday that it will spend around 200 billion won ($184 million) on expanding its production facilities for battery-related products. Out of the allocated fund, 150 billion won will be spent on enlarging the plant in Jeungpyeong, North Chungcheong, where SK Innovation produces lithium-ion battery separators.

“Demand for separators by battery producers has skyrocketed recently,” said a spokesperson, who added that the company had to expand the production capacity of the plant in order to keep pace with rising demand from battery makers as well as from manufacturers that produce products such as smartphones.

Although mainly known for its petroleum business, SK Innovation is the second largest lithium-ion battery separator producer in the global market by share after Japan’s Asahi Kasei Corporation. The company said the expansion will start this month and be completed by the second half of 2019.

The remaining 50 billion won will go into a project to expand the company’s battery manufacturing capacity in Korea.

Right now, SK Innovation runs six production lines at its plant in Seosan, South Chungcheong, where it can manufacture as much as 3.9 gigawatt-hours’ worth of batteries per year. A spokesperson explained that the company will build a seventh production line by the second half of next year to expand the capacity to 4.7 gigawatt-hours per year.

SK Innovation supplies batteries for electric vehicles made by Hyundai Motor and Kia Motors as well as Daimler AG, the German automotive group that owns Mercedes-Benz.

In addition to the sizable financial investment in the facilities in Korea, the company said its board of directors also decided to commit 840.2 billion won to construct and operate a battery production facility in Hungary to cater to its customers in Europe. While the company is in negotiations with the local government to finalize the details of the project, the spokesperson explained that construction will begin in February next year before going fully operational in early 2020. The facility in Hungary will add 7.5 gigawatt-hours’ worth of batteries to SK Innovation’s yearly battery production volume.

So far this year, the company has made nearly 3.2 trillion won of investment into its chemical and battery divisions.

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