SK to launch battery JV in China
By Kim Yoo-chul
SK Innovation CEO Koo Ja-young
SK Innovation, the nation’s largest oil refining firm, said Friday that it will launch its first battery joint venture (JV) in China in September by teaming up with Beijing Automotive Group and Beijing Electricians.
The company will invest 190 billion won to set up the new JV whose manufacturing line will have an annual output of 10,000 battery packs for use in electric vehicles. It said that it aims to become the No. 1 battery supplier.
“The venture will produce the biggest car battery supplier in China, the world’s biggest market for electric vehicles, with annual revenue of 200 billion won, at least,” said the statement.
It plans to complete the construction of facilities by the latter half of 2014.
An SK spokesman said the production capacity will expand to 20,000 by the end of 2017.
“We will provide battery cells to the venture from our local factory in the provincial city of Seosan before the venture goes into operation,” said the spokesman, adding that cooperation with Chinese companies will be expanded because SK intends to push projects to build electric vehicle eco systems.
According to SK Innovation, its vehicle eco systems include construction of battery charging spots and the creation of management schemes such as car-sharing and investment for infrastructure in related fields.
Despite the announcement, Moody’s Investors Service, a major credit ratings agency, maintained its Baa2 rating on the firm and didn’t change its stable outlook view on SK Innovation.
SK is becoming aggressive in its China business. Last month, it said it will invest around 410 billion won for a 35 percent stake in a separate joint venture with China Petroleum and Chemical Corporation.
Its biggest local rival LG Chem runs a massive battery plant in Michigan, the United States. LG officials declined to comment on whether it plans to build another plant in China.