SKIET vows to use IPO to solidify position in battery separator market

SK IE Technology CEO Roh Jae-sok speaks during a press conference at the Conrad Seoul hotel, Thursday. Courtesy of SK IE Technology

By Baek Byung-yeul

A few weeks after reaching a settlement with LG Energy Solution (LGES) in a blockbuster intellectual property dispute, a SK Innovation affiliate ― SK IE Technology (SKIET) ― vowed to boost its share in the promising battery separator market to solidify a leading position.

“We will continue to increase our market share in the exploding premium separator market to solidify our market leadership,” CEO Roh Jae-sok told reporters, Thursday. “By successfully completing our initial public offering (IPO) and enhancing competitiveness, we aim to contribute to the ecosystem of the electric car industry.”

SKIET, which was spun off from SK Innovation, supplies lithium-ion battery separators (LiBS) to electric vehicle (EV) makers including Hyundai Motor, Kia, Tesla, Volkswagen and Ford. It was the top supplier of wet separators with a market share of 26.5 percent last year, according to data provided by market tracker SNE Research.

Separators are membranes placed between a positively charged anode and negatively charged cathode of a battery to prevent an electrical short circuit.

Ahead of the IPO, SKIET said it plans to sell 21.39 million ordinary shares on the main KOSPI in mid-May, with the selling price ranging between 78,000 won and 105,000 won. In the run-up to the IPO, SKIET will proceed with a demand forecast for domestic and overseas institutions for two days from Thursday to Friday. General subscription for its shares are scheduled for April 28 and 29.

The top-tier premium separator market has been dominated by only a few players ― Japanese firms Asahi Kasei and Toray as well as SKIET ― but the Korean company expects demand for quality separators to grow over the next few years as more EVs take to the roads.

“In the wet separator market for EVs, the top-tier market will expand to 69 percent in 2025 from 44 percent in 2018,” the CEO said, adding that the price gap between products from the top-tier market and below will also become larger.

Given a flurry of EVs currently in the pipelines, demand for batteries is expected to grow, causing the battery separator market to keep growing.

SKIET plans to take advantage of the expected developments by accelerating factory expansion in Europe. The company decided recently to add a third and fourth factory there. Currently, SKIET is capable of producing over 1 billion square meters of batteries annually, which can be supplied to around 1 million EVs. Annual production capacity will be increased to 2.73 billion square meters in 2024.

The company saw sales surge 78.4 percent year-on-year in 2020 to 469.3 billion won ($420 million), while operating profit increased 55.4 percent over the same period to 125.2 billion won.