Battery makers to invest W2.6 tril. by 2020

Trade, Industry and Energy Minister Paik Un-gyu, center, speaks at meeting with representatives of the battery industry, Friday. The country's top three battery makers announced 2.6 trillion won in investment plans. / Courtesy of Ministry of Trade, Industry and Energy

By Yoon Ja-young

The country's leading battery makers said they will make a combined 2.6 trillion won investment here by 2020 to take the lead in global competition. They also asked the government for a solution to their set back in China following the deployment of a U.S. missile defense system in Korea.

Trade, Industry and Energy Minister Paik Un-gyu met representatives of the battery industry Friday to discuss measures to enhance competitiveness. The top management of the country's top-three battery makers, LG Chem, Samsung SDI, and SK innovation, as well as representatives of battery material and equipment companies, participated in the meeting.

"The secondary cell battery is a new industry with huge growth potential. It will have an immense ripple effect on related industries such as electric vehicles, drone and new energies industries," the minister said, stressing that there should be cooperation between government and business.

The top-three battery makers announced their plans to make around 2.6 trillion won in investments here by 2020.

It includes a 610 billion won investment in R&D to improve secondary cells for electric vehicles. They also plan to expand their production facilities - LG Chem's Ochang plant, Samsung SDI's Ulsan plant and SK Innovation's Seosan plant - as preemptive measures to cope with expansion of electric vehicles and energy storage system (ESS) markets.

The battery companies vowed to make efforts so that their investments lead to the creation of more jobs, which is the top priority of the Moon Jae-in administration.

They, however, pointed out that they are suffering due to the Chinese government's hostile measures against Korean battery companies. Last December, the Chinese government excluded electric vehicles with Korean batteries from gaining subsidies. Since a subsidy is nearly half the electric vehicle price, the exclusion means there will be no ground for Korean battery makers. The Chinese government made the decision as an apparent economic retaliation against Korea for its deployment of the U.S. Terminal High Altitude Area Defense (THAAD) system in Korea.

Battery firms also said that they are suffering from soaring prices of materials such as cobalt.

The minister said that the government will make efforts to seek a concrete and effective solution.

"The government will prepare plans to innovate and seek cooperation with the secondary battery industry this year," he said.

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