LS Group to invest $1.3 bil. in Saemangeum to produce secondary battery precursors

President Yoon Suk Yeol, center, applauds a 6.6 trillion won investment won by Saemangeum National Industrial Complex at Gunsan Saemangeum Convention Center, North Jeolla Province, Wednesday. Yonhap

By Lee Kyung-min

LS Group will invest over 1.8 trillion won ($1.3 billion) in the Saemangeum National Industrial Complex to build a large secondary battery precursor factory capable of producing 120,000 tons of the material starting in 2028, according to a ministry-supervised organization, Wednesday.

Precursors are materials used to make cathodes and are manufactured by combining nickel, cobalt and manganese. The performance and purpose of a battery are determined by which active precursors were used for its cathode.

The ultimate goal of LS Group is to reduce its dependence on China for precursor supplies, down significantly from the current 80 percent, as underpinned by LS-L&F Battery Solution, a joint venture between LS, the holding firm of LS Group, and L&F Corp., a local battery manufacturer.

LS Group said the battery materials supply chain will be fortified by the stable localization of nickel sulfate, precursors production. The joint entity currently under corporate merger review will be established as an LS Group affiliate.

The Saemangeum Development and Investment Agency (SDIA) said it signed a deal with LS Group, the municipal government of North Jeolla Province, Gunsan City and Korea Rural Community Corp.

LS Group plans to begin the construction of facilities before the end of this year and create 1,450 jobs. LS Group, the 16-largest conglomerate in Korea, said the battery investment will diversify its business portfolio to include electric vehicles (EVs) and semiconductors.

“Saemangeum has been making rapid progress under the Yoon Suk Yeol administration,” SDIA and LS Group said in a joint statement. “The investment will catalyze growth not only for the industry but for the whole country. The government and the private players will mobilize utmost efforts to advance the rechargeable battery industry, certain to support the country's future growth.”

According to SDIA, the investment total pledged and locked in by 31 firms over the past year spiked to over 6.6 trillion won since Yoon took office. The figure is a fourfold increase from 1.5 trillion won in investments in 2013, when the agency was established, to 2022.

Local and foreign investors include EcoPro Materials, LG Chem and SK On as well as GEM Korea, a joint venture between China's GEM and Korea.

The growth prospect of Saemangeum will become more robust, according to an estimate by Jeonbuk Institute.

The organization in North Jeolla Province said a 7 trillion investment will translate into a production inducement effect of 8.5 trillion won and generate 32,000 jobs.

The contribution of the province to the national economy as measured by gross regional domestic product (GRDP) will inch up from 2.7 percent in 2021 to 3.5 percent in 2028.