South Korea’s SK Innovation has agreed to sell its loss-making lithium battery separator assets in China to Yunnan Energy New Material, known as Semcorp.
Semcorp said in a Shenzhen Stock Exchange release on May 27 it planned to acquire a 100% stake in SK Battery Materials Technology from the Korean battery giant’s EV battery subsidiary, SK IE Technology, for Rmb400 million ($60 million).
Completion of the transaction is subject to the approval of China’s State Administration for Market Regulation.
SK’s separators unit has good basic production equipment and a solid hardware foundation but has been suffering from weak market expansion, Semcorp said.
That meant the capacity utilisation rate has remained low for a long time. Low utilisation further increases unit production costs, creating a vicious cycle in operations. This cycle ultimately leads to operating losses.
Semcorp said the deal would quickly replenish the unit’s existing production capacity and significantly shorten production times. The takeover will boost Semcorp’s own existing Li battery separator production capacity, allowing it to accept increase orders.
SK said its separator plant in China’s eastern Jiangsu province has an annual production capacity of around 940 million m2, with eight base film production lines and 10 coating production lines for active material application.
Last March, Semcorp subsidiary Semcorp Yuxi announced that it had completed all eight production lines of its phase one project in southwest China, designed with an annual output of 1.6 billion m2 of Li battery separators.
