SKC invests in British anodes company Nexeon

SKC CEO Lee Wan-jae [SKC]

SKC, a chemical affiliate of SK Group, is going into the silicon anode material business.

The company, 40 percent owned by SK Inc, said Monday it is investing $33 million in a British anodes material company Nexeon.

The investment will be made through a consortium consisting of SKC and two private equity firms, SJL Partners and BNW Investment.

The consortium will invest a total of $80 million.

SKC and BNW Investment will contribute 51 percent of the investment while SJL Partners will recruit additional investors to handle the remaining 49 percent.

"After the deal is closed SKC will have a portion of Nexeon's shares and have business right for its anodes materials including silicon and carbon," SKC said in a statement Monday.

Silicon is considered a promising anodes material for an electric vehicle (EV) battery to replace the more common graphite. Silicon-based anodes, which are used with graphite-based anodes, can extend the range of an EV and speed up its charging time.

At the moment, silicon-based anodes that have less than 15 percent silicon are at an early stage of commercialization, according to SKC.

SKC believes the silicon-based anodes market which stood at $400 million last year will grow to $2.9 billion in 2025 and reach $14.6 billion by 2030.

Nexeon is a startup founded in 2006 that has multiple patents related to silicon-based anodes.

SKC plans to commercialize low-silicon-content anodes independently and cooperate with Nexeon for high-silicon-content anodes afterwards.

SKC believes its capability for mass production and global marketing will help spearhead the growing battery material market.

"On top of SKC and Nexeon's cooperation, we can make synergy with the copper foil business and provide high-quality and price-competitive battery material solutions for our clients," the company said. "SKC's business will include secondary battery, semiconductor and eco-friendly material."

Early this year, the board of SK Nexilis, a wholly owned subsidiary of SKC, agreed to build a copper foil factory in Europe that is capable of producing 50,000 tons of copper foil per year. The investment in the new factory is expected to reach $620 million and it will be located in Poland.

Copper foil is another core material for anodes.

In earnings announced Monday, SKC reported net profit of 185 billion won ($157 million) in the third quarter of this year, up 1,282 percent from a year ago. Rising demand for battery material, especially copper foil, factored in.

Revenues jumped 32.8 percent year-on-year to 886.8 billion won and operating profit reached its all-time quarterly high of 145.8 billion won, a 139 percent year-on-year jump.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]