Sales of No.4 copper foil producer Iljin Materials may excite Lotte, LG among others

The sale of Iljin Materials, the world’s fourth-largest copper foil manufacturer, could excite Korea’s major conglomerates like Lotte and LG eager to expand battery materials business to meet the growing demand in future mobility.

According to industry sources, Lotte Chemical, LG Chem, and POSCO were among invitees as well as a handful of private equity funds to the tender of a 53.3 percent stake in Iljin Materials valued at around 3 trillion won ($2.9 billion).

Lotte Chemical can be a strong candidate as it had pledged 4 trillion won in battery materials. Its acquisition of Iljin Materials can create great synergy with its cathodes, anodes, separators, and electrolytes businesses Lotte wishes to groom as its mainstay growth engines. It also has enough ammunition as it bowed out of the 1.2 trillion won race over a PI advanced materials maker.

LG Chem can also be interested in Iljin Materials as it has been focusing on materials for rechargeables for profit after the spinoff of LG Energy Solution. It has been actively expanding cathode and separator businesses.

SK would be off the list over antitrust issues as it holds SK nexilis, No.1 in the world’s copper foil market.

The tender arrives amid heated competition for battery sourcing.

[Source: SK nexilis]

According to energy industry researcher SNE Research on Wednesday, global demand for copper foil is likely to rise 40 percent per year from 265,000 tons in 2021 to 748,000 tons in 2025. As a result, the copper foil market is also projected to expand from 1 trillion won in 2018 to over 14 trillion won in 2025.

Copper foil is ultra-thin metal plate with a thickness of two micrometers. It was mainly used for semiconductor packages. Recently, its demand as a core part of lithium-ion batteries has surged, as one electric vehicle needs 30~40 kilograms of copper foil, compared with 5 grams for a smartphone.

Due to high technological barrier, the market used to be dominated by Japanese firms such as The Furukawa Electric and Nippon Denkai. But Korean firms, focusing on high-quality copper foil production, have overtaken the market. Last year, four firms, including Korea’s SK nexilis and Iljin Materials, China’s Watson, and Taiwan’s Changjun, accounted for 72 percent of the market.

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