November 25, 2024

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EcoPro BM CEO Joo Jae-hwan (right) and Samsung SDI Vice President Kim Ik-hyeon hold a signed memorandum of understanding on a new supply deal at EcoPro BM’s headquarters in Cheongju, North Chungcheong Province, Friday. (EcoPro BM)

EcoPro BM, a battery materials manufacturing subsidiary of EcoPro, said Sunday it has forged a deal with Samsung SDI to supply 44 trillion won ($34 billion) worth of cathode materials for electric vehicle batteries.

From next year to 2028, the battery materials company is poised to supply high-nickel cathode materials that consist of more than 80 percent nickel to Samsung SDI’s EV battery manufacturing plant in Hungary.

EcoPro BM CEO Joo Jae-hwan, Samsung SDI Vice President Kim Ik-hyeon and other company executives participated in the signing ceremony at EcoPro BM’s headquarters in North Chungcheong Province on Friday.

EcoPro BM said it plans to ship the battery materials from its plant in Debrecen, Hungary, which is currently under construction, starting in 2025. The annual production capacity of the facility is projected to be 108,000 tons, sufficient to make around 1.35 million EVs. Before commercial operations of the plant, the company will supply materials from its complex in Pohang, North Gyeongsang Province.

Other subsidiaries including the lithium processing unit EcoPro Innovation and EcoPro AP, which supplies nitrogen and oxygen, will join the operation at the Hungary base to cut production costs, the company added.

Samsung SDI has been a key corporate client for EcoPro since 2011, having supplied a total of 200,000 tons of high-nickel cathode materials to the battery maker up to this year. Last year, business with Samsung SDI took up approximately 30 percent of EcoPro’s sales revenue.

In 2021, the two set up a joint venture called EcoPro EM that operates two cathode materials manufacturing plants in Pohang with an annual capacity of 90,000 tons. Aside from Samsung SDI, it is supplying high-nickel cathode materials for global carmakers including Mercedes-Benz, BMW and Volvo.

“EcoPro and Samsung SDI’s partnership has played a vital role in boosting South Korea’s battery industry. This long-term supply deal will further strengthen our business relations,” Joo said in a statement.

Kim noted that Samsung SDI is expected to gain a competitive edge in global battery cell markets with a stable supply of cathode materials from EcoPro.

By Byun Hye-jin  (hyejin2@heraldcorp.com)