SEOUL, May 24 (Korea Bizwire) — South Korea’s battery makers are aggressively expanding on research and development and facility investments despite a cost burden arising from a surge in the prices of raw materials.
According to LG Energy Solution Ltd. (LGES)’s quarterly report, its cathode material purchase price averaged US$34 per kilogram in the first quarter of this year, up 56 percent from a year ago.
Meanwhile, Samsung SDI Co.’s average cathode material purchase price also rose by 24.4 percent year on year to $34.8 per kilogram in the first quarter of this year.
The nation’s battery makers typically produce nickel cobalt manganese battery cells. The price of cathode materials rose along with the hike in the price of other components.
Despite the increase in the price of cathode materials, however, battery makers are aggressively expanding investment.
LGES invested 909 billion won (US$719 million) for facility expansion in the first quarter of this year, more than double what it spent a year ago.
The company’s total investment in plants in Poland, China, and the U.S. amounted to 20.6 trillion won in the first quarter of this year, up 5.6 trillion won from a year ago.
R&D spending also rose by 41.4 percent from 129.8 billion won to 183.6 billion won during the same period. The share of R&D in its total revenue inched up from 3.1 percent to 4.2 percent.
Samsung SDI’s first quarter investment amounted to 569.6 billion won in the first quarter of this year, up 79.6 percent from a year before. Its first-quarter R&D spending rose by 30.3 percent year on year to 258.3 billion won.
Experts noted that the primary factor behind battery makers’ investment expansion is in line with their efforts to find a breakthrough through aggressive investment in a situation where uncertainties brought on by geopolitical issues and supply chain risks continue unabated.
Kevin Lee (email@example.com)