COSMO Advanced Materials to Acquire Samsung SDI’s NCM Precursor Production Facilities

Nov 27, 2019

COSMO Advanced Materials, which manufacturers cathode active materials for secondary batteries, has established a vertically integrated system for the production of cathode materials by acquiring precursor production line of STM that is a subsidiary of Samsung SDI.
According to the industry, COSMO Advanced Materials has decided to acquire STM’s precursor production facilities located within Samsung SDI’s facility in Ulsan and is currently discussing with Samsung SDI regarding the purchase. It is expected that the acquisition will be completed by end of this year at the earliest and early next year at the latest.
STM is a company that was co-established by Samsung Fine Chemical and TODA KOGYO of Japan in May of 2011 in order to produce cathode active materials and precursors that are key materials of a secondary battery. When Samsung SDI acquired battery materials business of Samsung Fine Chemical, which was a subsidiary of Samsung SDI, in September of 2015, it also acquired entire shares of STM and it has become STM’s largest shareholder. In December of the same year, Samsung SDI also acquired entire shares of TODA KOGYO and it has been managing STM as a complete subsidiary.
STM stopped producing precursors for lithium-ion battery in August of last year and it has been focusing on producing cathode active materials because it believed that economic feasibility of self-production was lower than external financing due to high personnel expenses and operation costs. Since it stopped producing precursors for lithium-ion battery, it has been considering converting the corresponding production line into a pilot line for R&D purpose or selling the production line. COSMO Advanced Materials has decided to acquire corresponding production facilities.

Panoramic view of COSCMO Advanced Materials’ plant (Source: COSMO Advanced Materials) <Panoramic view of COSCMO Advanced Materials’ plant (Source: COSMO Advanced Materials) >

Precursor is a material that is used right before a cathode active material is manufactured and it becomes a cathode material when it is combined with lithium. STM had produced NCM (Nickel, Cobalt, Manganese) precursor that is mostly used for mid to large lithium-ion batteries that go into electric vehicles and ESS (Energy Storage System).
COSMO Advanced Materials can improve efficiency and profitability by producing its own NCM precursors that are currently imported from China. It can also receive raw materials from its subsidiary called COSMO EcoChem and establish a vertically integrated system that will allow COSMO to produce precursors and cathode active materials on its own.
This acquisition will be meshed together with COSMO’s investment to expand its NCM cathode active material business that is expected to be completed in 2020. Although its main product used to be LCO (Lithium Cobalt Oxide) cathode active material that is mostly used for batteries that go into IT devices such as Smartphone and laptop, its plan is to focus on NCM material that is used for mid to large batteries. It has also started supplying NCM cathode active materials for mid to large batteries to major South Korean battery manufacturers since the middle of this month. In August, it decided to invest $36.6 million (43 billion KRW) into extending its high-nickel NCM cathode active material facilities.
“We are currently discussing internally about purchasing facilities as there is an increased need for NCM precursor due to full-on expansion of our NCM cathode active materials.” said a representative for COSMO Advanced Materials. “We are discussing about particulars about operation.”
“Although we are having discussions about selling idle production facilities, there is no finalized contract with a particular company.” said a representative for Samsung SDI.
Staff Reporter Jung, Hyeonjung | iam@etnews.com

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