[Exclusive] SK Completes Vertical Integration of US Battery Industry Including Core Material Copper Foil Factory

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[Asia Economy Reporter Hwang Yoon-joo] SKC, responsible for secondary battery materials business within SK Group, is set to build a copper foil factory in Georgia, USA. Once this factory is completed, SK Group will complete vertical integration in the US, extending from electric vehicle batteries to materials.

According to industry sources on the 27th, SKC is considering constructing a copper foil factory in Georgia, USA, following its facilities in Malaysia and Europe. The factory site is likely to be Covington, located 35 miles east of Atlanta. Covington houses SKC's US subsidiary and a polyester film factory, providing favorable conditions for establishing a new factory upon additional investment.

The factory size has not been finalized but is expected to be at least 50,000 tons, with an investment scale of approximately 700 billion KRW. SKC plans to finalize the European factory site this year and proceed with construction, followed immediately by the US investment.

SKC's investment in the US is significant. Through this copper foil factory, SK Group will establish battery vertical integration in the US, the largest battleground for electric vehicles. Covington is about a 30-minute drive from Jackson County, where SK Innovation's battery factory is located. Georgia, including Covington and Jackson County, along with Tennessee and Alabama, is known as the "Eastern Sunbelt." This region is the largest production base in the US for global automakers. Notably, Georgia has a deep connection with SK Group. When SKC invested in Covington in 1999, it was the first investment by a Korean conglomerate in Georgia.

SK Innovation is currently constructing electric vehicle battery plants 1 and 2 in Georgia with annual capacities of 9.8GWh and 11.7GWh, respectively. The total investment for these plants is about 3 trillion KRW. Separately, the battery joint venture BlueOvalSK, established by SK Innovation and Ford, has a production capacity of 60GWh. With the confirmed expansion of Georgia plants 3 and 4, SK Innovation is expected to produce at least 100GWh of batteries in the US alone. As SK Innovation aggressively expands production capacity centered in the US, it is projected to rank third in annual production capacity by 2030, following CATL and LG Energy Solution.

SK Group is also providing behind-the-scenes support for the battery business. SK Inc., the group's investment holding company, is increasing investments in advanced electric vehicle material technologies such as copper foil for batteries and next-generation lithium metal batteries. It invested a total of 370 billion KRW in Watson, a copper foil manufacturer for electric vehicle batteries, in two rounds in 2019 and 2020. Watson plans to expand production capacity to 150,000 tons by 2025 and is considering an initial public offering (IPO) in the future. SK Inc. aims to enhance business synergy between Watson and SKC (SK Nexilis), pursue additional global mergers and acquisitions, internalize two or more next-generation battery material technologies, and achieve an EBITDA of 1.6 trillion KRW in the battery materials sector by 2025. SolidEnergy Systems, in which SK Inc. invested 70 billion KRW in two rounds, has succeeded in developing prototypes of lithium metal batteries, a next-generation battery that addresses the shortcomings of lithium-ion batteries.

A battery industry official said, "With the implementation of the USMCA (United States-Mexico-Canada Agreement), tariff benefits can only be obtained by using automobile parts and batteries produced in the US," adding, "The large-scale US investments by domestic battery companies such as SK Innovation signify their determination not to lose leadership in the US market."

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