POSCO Chemical, 1 Trillion Won Paid-in Capital Increase... Accelerating Investment in Secondary Battery Materials

[Asia Economy Reporter Park Soyeon] POSCO Chemical is conducting a paid-in capital increase of 1 trillion KRW to invest in secondary battery materials. Based on large-scale capital expansion, the company plans to accelerate investments to secure a leading position in the rapidly growing global market and continue future growth.

On the 6th, POSCO Chemical held a board meeting and resolved to carry out a paid-in capital increase worth 1 trillion KRW. It will be conducted through a rights offering followed by a general public subscription, and if there are any unsubscribed shares, the underwriting securities company will fully subscribe. The allocation of new shares will be based on December 9, and the scheduled listing date of the new shares is February 3 next year. POSCO, which currently holds a 61.3% stake, along with Pohang University of Science and Technology and the employee stock ownership association, are expected to participate as related parties.

As the largest shareholder, POSCO plans to invest about 540 billion KRW through subscription for 100% of its held shares, actively engaging in the secondary battery materials new growth investment that the group is focusing on.

POSCO Chemical will concentrate the 1 trillion KRW investment on the growth of the secondary battery materials business to make a full-scale leap as a global leading company in chemical and energy materials.

The 1 trillion KRW fund will be used as 690 billion KRW for facility investments such as expanding the cathode material plant in Gwangyang, 160 billion KRW for securing raw materials like graphite and lithium, and 150 billion KRW for constructing a cathode material production plant in Europe, where electric vehicle demand is rapidly increasing.

Regarding the paid-in capital increase, POSCO Chemical explained, "It enables proactive fundraising to respond to rapidly growing demand and secures a stable financial structure to prepare for mid- to long-term business expansion. Through this capital expansion and investment, we will create a virtuous cycle where business expansion leads to profit growth, significantly enhancing corporate value."

The global electric vehicle market is expected to grow significantly, supported by each country's eco-friendly vehicle promotion policies, the high performance of electric vehicles, and aggressive investment expansion by major battery companies. Annual electric vehicle sales are expected to grow from about 2.3 million units in 2019 to 25 million units by 2030. Accordingly, demand for key battery materials is also expected to increase, with cathode materials rising from 370,000 tons in 2019 to 2.04 million tons in 2030, and anode materials from 230,000 tons to 1.2 million tons.

POSCO Chemical plans to seize the global market and lay the foundation for future growth by timely responding to these market opportunities with investments. By 2030, it aims to expand mass production capacity of cathode materials from the current 40,000 tons to 400,000 tons, and anode materials from 44,000 tons to 260,000 tons.

As a growth strategy, in the cathode materials business, POSCO Chemical will establish mass production systems at key bases centered on Korea, China, and Europe, where large customers are concentrated, to respond promptly and appropriately to large-scale orders from global battery and automaker companies.

In the anode materials business, besides natural graphite anode materials, the company will diversify products and expand production capacity with next-generation materials such as artificial graphite-based and silicon-based materials mainly used in electric vehicle batteries.

In the raw materials business, POSCO Chemical plans to pursue long-term internalization investments in lithium, graphite, and precursors to secure supply stability and maximize business profitability.

Through these efforts, POSCO Chemical aims to secure mass production capacity at a level that can lead the global market, increase market share, and become a top energy materials player with differentiated competitiveness in raw materials, marketing, and process technology. The company targets a 20% global market share and annual sales of 23 trillion KRW in the secondary battery materials business by 2030.

Meanwhile, as part of this investment expansion, POSCO Chemical also announced today an investment decision of 275.8 billion KRW to expand the production line with an annual capacity of 30,000 tons at the cathode material plant in Gwangyang. This is the fourth phase expansion of the Gwangyang plant to respond to large-scale orders for NCMA cathode materials. Upon completion of the expansion, POSCO Chemical will operate a domestic cathode material production system with an annual capacity of 100,000 tons starting in 2023. The 100,000 tons of cathode materials can be used for approximately 1.1 million electric vehicle batteries of 60kWh capacity.

This content was produced with the assistance of AI translation services.