South Korean battery materials firm Posco Future M targets $32.6 bln sales by 2030 (updated)

Posco Future M

28/08/2023 03:43

(Adds CEO comment, background on LFP batteries, share move)
    By Joyce Lee and Heekyong Yang
       SEOUL, Aug 28 (Reuters) - South Korean chemical and
battery material maker Posco Future M Co Ltd  003670.KS  said on
Monday it is targeting 43 trillion won ($32.57 billion) in sales
by 2030, as demand for batteries for electric vehicles is
expected to rise throughout this period. 
    Posco Future M, which supplies to battery cell makers LG
Energy Solution (LGES)  373220.KS , Samsung SDI  006400.KS  and
Ultium Cells, a joint venture of General Motors  GM.N  and LGES,
said it targets an operating profit of 3.4 trillion won by 2030.
    In 2022, the company reported 3.3 trillion won in revenue
and 166 billion won in operating profit. 
    To achieve its targets, Posco Future M said it plans to
strengthen its ability to encompass entire lifecycle of battery
materials from access to raw material mines, production to
recycling, as well as take rapid investment decisions to expand
global production capacity. 
    "We are close to confirming more orders with major customers
regarding cathode materials (for batteries)," said CEO Kim
Jun-hyung. 
    "We will drastically increase production capacity... through
investing at a faster rate than we do now."  
    In May, POSCO Future M said it plans to set up a 1.2
trillion won battery material joint venture with Zhejiang Huayou
Cobalt  603799.SS  in South Korea as part of the firm's effort
to strengthen its battery material supply chain management.
    Separately in June, the company with its parent Posco
Holdings Inc  005490.KS  announced a 1.5 trillion won-battery
material joint venture with CNGR. 
    Battery demand for vehicles in the United States grew by
around 80% in 2022, despite electric car sales only increasing
by around 55%, according to the International Energy Agency. 
        As the auto industry scrambles to produce more
affordable EVs, whose most expensive components are batteries,
lithium-iron-phosphate (LFP) batteries have been gaining
traction. LFP batteries are less expensive than nickel-cobalt
batteries. 
    Chinese cell makers, such as CATL  300750.SZ  and BYD
 002594.SZ , dominate the LFP battery market. 
        Posco Future M said last month it plans to annually
produce 20,000 metric tons LFP cathode in 2025 and increase its
LFP cathode production capacity by about 7.5 times to 150,000
tons by 2030. 
    Shares in Posco Future M have risen about 2.6 times
year-to-date as of Monday.  


($1 = 1,320.4000 won)

 (Reporting by Joyce Lee and Heekyong Yang
Editing by Shri Navaratnam)
 ((joyce.lee@tr.com;))