SK Innovation, Battery Sales Surpass 1 Trillion Won for the First Time

Investment in Building Factories in the US and Europe Following China
Refining and Chemical Businesses Remain Weak

An employee of SK Innovation's Jeungpyeong plant is standing holding a produced lithium-ion separator (LiBS).

[Asia Economy Reporter Choi Dae-yeol] SK Innovation's battery business sales have surpassed 1 trillion won for the first time in history. This achievement comes as the company's traditional core businesses such as refining and chemicals have struggled to recover amid the impact of COVID-19. With domestic and overseas factories, which have seen increased investment, gradually reaching full operation, the company is continuing its aggressive moves, including confirming the construction of an additional factory in Europe.

According to SK Innovation's announced performance for last year on the 29th, battery business sales reached 1.6102 trillion won, more than doubling from 690.3 billion won the previous year. In particular, fourth-quarter battery business sales hit 479.2 billion won, setting a quarterly record. This significant increase in sales is attributed to the stable operation of the Hungary Plant 1 and China Changzhou Plant, which began mass production last year, leading to increased sales volume.

However, due to initial costs at overseas factories, the business continued to operate at a loss. Last year's operating loss was recorded at 426.5 billion won. A company official explained, "Sales volume increased at Hungary Plant 1 and China Changzhou Plant, which started mass production last year," adding, "As overseas factories stabilize earlier and sales volume grows, profitability is also improving."

The battery business is expected to reach its break-even point around next year. During a conference call, SK Innovation stated, "With the expansion of new battery volumes, the loss in the battery sector is expected to decrease by 30% compared to the previous year," and "Our goal is to achieve operating profit break-even in 2022."

SK Innovation battery production plant in Komarom, Hungary.

SK Innovation emphasized that sales growth in the battery business will continue. This year, with the additional overseas factories in Yancheng and Huizhou, China, each with a production capacity of 20GWh, starting full operation from the first quarter, the total production capacity will increase to 40GWh, about four times that of the end of 2019. Additionally, the Hungary Plant 2 with a capacity of 9.8GWh and the first plant in Georgia, USA, are planned to begin mass production from the first quarter of next year. The second plant in Georgia is scheduled for the first quarter of the following year.

The company also confirmed plans to build additional factories to meet further demand in Europe. It decided to invest 1.2674 trillion won in its Hungarian subsidiary. Specific investment scale, production capacity, and site details are to be announced in the afternoon after consultations with local authorities. Based on the investment amount, it is expected to be larger than the previous Plants 1 and 2.

General Manager Kim Jun said, "Despite the worst management environment never experienced before due to COVID-19, visible results in the company's new growth businesses are being realized."

Meanwhile, SK Innovation's consolidated operating loss last year was 2.5688 trillion won, turning to a deficit compared to the previous year. During the same period, sales decreased by 30.7% to 34.1645 trillion won, and net loss also turned to a deficit at 2.1609 trillion won, according to provisional figures.

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