LG Chem Makes Equity Investments in Chinese Copper Laminate Company, ‘DeFu’
■ 40 billion won investment in the ‘Jiujiang DeFu Technology,’ a manufacturer of copper laminate that is a core battery part
- Aiming to expand new battery material business portfolio and to procure business capacities
■ Signed MOU for constructing long-term cooperative partnership in the copper laminate business
- Scheduled to discuss various cooperation measures for battery laminates
■ Chul Nam (President, Advanced Materials Company),
“We will strengthen our value chain through omnidirectional collaboration with global companies and enhance the competitiveness for existing businesses and capacities for new businesses to lead the battery materials market”
LG Chem is strengthening its value chain in the battery materials sector through the copper laminate business.
In relation to this, LG Chem announced on the 17th that it will invest in equities for China’s Jiujiang DeFu Technology (hereinafter called DeFu), which manufactures copper laminate that is a core part of secondary batteries, by investing approximately 40 billion KRW.
Copper laminate is a thin copper sheet measuring to about 1/15 the size of human hair, and it is a core material for EV batteries that is used in battery anode materials to make electric currents flow.
The thinner it is, the more it fills active materials in the anode to increase battery capacity. It is expected that demand will rapidly grow due to the explosive growth of the battery market.
DeFu is the third-ranked copper laminate manufacturer in China based on production capacity, and it produces ‘battery laminate,’ a copper laminate for secondary batteries, and copper laminates for printed circuit boards (PBC) in electronic products.
It operates production plants in the two regions of Jiujang, Jiangxi Province and Lanzhou, Gansu Province in China.
Its current production capacity is 49,000 tons annually, and it plans to expand its scale to 78,000 tons by 2022. Q1 revenue was posted as 113 billion KRW, quadrupling in revenue compared to the same period of the previous year.
Based on the industry’s highest cost competitiveness and production abilities, DeFu possesses the technologies to compete with global copper laminate production companies.
In particular, it has the advantage in producing consistent high-quality copper laminates as it is the only local Chinese company possessing proprietary copper laminate additive technologies.
Through this, it began supplying to major global battery companies, and it plans to be listed in ChiNext of the Shenzhen Stock Exchange in the first half of next year.
LG Chem plans to focus on fostering the battery materials business as its new growth engine, thus deciding to make equity investments in DeFu, which possesses not only growth potential, but also synergy effects between businesses.
With this investment, LG Chem will be able to not only strengthen its battery materials portfolio based on global business networks, but also procure the capacities in new materials businesses in the anode sector through strategic investments.
Furthermore, LG Chem plans to enter an MOU to construct a long-term cooperative partnership in the copper laminate business with DeFu, while continuing talks about a variety of cooperation plans for the battery laminate business.
Chul Nam (Senior Vice President / President, Advanced Materials Company) said, “We will strengthen our value chain through omnidirectional collaboration with global companies,” adding, “We will enhance the competitiveness for existing businesses and capacities for new businesses to lead the battery materials market.”
Meanwhile, according to Hana Financial Investment, the global market demand for secondary battery copper laminates is expected to grow from 260,000 tons this year to 620,000 tons by 2025 at an annual average of 25%.