[Interview] "Acquired by a Chinese Cathode Firm, Now Making a U-Turn"... Yoo Sangyeol, Vice Chairman of Jaese Nungwon

In Response to the US OBBBA Act
"Ronbay's Stake to Be Reduced Below 25%"
Paid-in Capital Increase to Start with Subsidiary EMT
Cathode Production Capacity to Expand to 70,000 Tons
Mass Production of LFP Cathodes with 30% Lower Manufact

Yoo Sangyeol, Co-CEO (Vice Chairman) of Jaese Nungwon, is being interviewed by Asia Economy. Photo by Kang Heejong

Jaese Nungwon (JS Energy), a cathode material company wholly owned by Chinese battery materials firm Ronbay, is set to reduce its Chinese ownership stake to below 25% and target the U.S. and European markets. The company is currently attracting investments from external institutions and plans to go public on the domestic stock exchange within the next two to three years.

Yoo Sangyeol, Co-CEO (Vice Chairman) of Jaese Nungwon, recently told Asia Economy in an interview at the company's headquarters in Seocho-dong, Seoul, "In order to respond to the U.S. 'One Big Beautiful Buy America Act' (OBBBA), we plan to reduce Ronbay's stake to below 25%," adding, "We are currently raising investment through a paid-in capital increase."

Jaese Nungwon was founded in 2013 by Vice Chairman Yoo and was acquired by Ronbay in 2014. After selling the company, Yoo became Ronbay's co-founder and sole Vice Chairman. He is currently known to be the second-in-command within the group.

Ronbay, which is competing for the top two positions in the global ternary battery market, primarily supplies products to Chinese battery cell companies. Jaese Nungwon produces high-nickel cathode materials at its Chungju plant and supplies them to U.S. automobile companies and Japanese battery manufacturers.

The reason Jaese Nungwon is seeking to reduce its Chinese ownership is due to the Prohibited Foreign Entity (PFE) regulation newly introduced under OBBBA. Batteries that source a certain percentage of parts or materials from PFEs will no longer be eligible for the Advanced Manufacturing Production Credit (AMPC) in the U.S. PFEs essentially refer to Chinese companies. As Jaese Nungwon is currently a wholly owned subsidiary of Ronbay, its entry into the U.S. market would be blocked.

Vice Chairman Yoo stated, "We plan to attract external investment in our precursor subsidiary EMT through a paid-in capital increase." EMT was established by Yoo in 2010 and operates a plant in Chungju. Jaese Nungwon holds a 72.4% stake in EMT, meaning that under the current ownership structure, EMT also qualifies as a PFE.

After securing external investment, Jaese Nungwon and EMT plan to maintain independent management from Ronbay and pursue initial public offerings. This effectively marks a return to Korean ownership after having been acquired by a Chinese company. Yoo said, "After attracting external investment, EMT will go public within two years and Jaese Nungwon within three years."

Following the completion of its first plant in Chungju, Jaese Nungwon plans to complete its second plant in October. The combined annual production capacity of high-nickel cathode materials from both plants will reach 70,000 tons. EMT plans to expand its annual production capacity from the current 6,120 tons to 40,000 tons by adding production facilities in Japan, Indonesia, and other countries by next year.

Last year, Jaese Nungwon established subsidiaries in the U.S. and Poland. Under this structure, Ronbay focuses on the Chinese market, while Jaese Nungwon targets the U.S. and European markets. Vice Chairman Yoo stated, "We also plan to launch a battery recycling business through our subsidiaries in the U.S. and Poland." The plan is to import black mass (the black powder obtained from shredding used batteries) locally, extract minerals in Korea, and then supply them to EMT or Jaese Nungwon, thereby establishing a closed-loop battery recycling system.

Ronbay and Jaese Nungwon also plan to enter the lithium iron phosphate (LFP) market. Vice Chairman Yoo said, "We have developed LFP cathode material technology that reduces manufacturing costs by 30% compared to existing methods, and we plan to start mass production simultaneously in China, Korea, and Poland," adding, "Rather than building new production facilities, we will either acquire or lease existing ones."

Starting in the third quarter, Ronbay plans to begin full-scale supply of cathode materials for sodium-ion batteries to CATL. Vice Chairman Yoo stated, "Within the next two to three years, sodium-ion batteries will become a hot issue," adding, "Korean companies will not be able to ignore this trend."

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