A bird’s-eye view of the Malay KKIP Industrial Complex where SKC will be built. Photo KKIP website
SK Nexilis, which makes copper foil, a key material for electric vehicle batteries, has decided to build a plant in Kota Kinabalu, Malaysia, ending the friction with the company’s Iljin Group. Copper foil is a core material that acts as a support that dissipates heat generated from the battery and maintains the shape of the electrode.
According to SK on the 27th, Nexilis decided to set the site for its first overseas expansion to Kota Kinabalu KKIP Industrial Complex. The company plans to invest 650 billion won by 2023 to grow it into a company with an annual output of 10 tons. SK Nexilis is 100% owned by SKC, and the largest shareholder (40%) of SKC is SK Corporation.
The reason why the energy industry is paying attention to SK’s investment in Malaysia is the conflict with Iljin Group, a mid-sized company. It was also said that the conflict between the two companies is turning into a’second LG-SK battery dispute’ in the industry and politics. The controversial place was Kuching, one of Malaysia’s four largest cities on the island of Borneo. Iljin Materials, a material company of the Iljin Group, has built and operated a copper foil factory there since 2017.
Kuching, Malaysia-Kota Kinabalu is 1000 km away by car. Photo google map
However, in the second half of last year, news came out that SK was reviewing the site for a copper foil factory in the same city, and a problem arose. Iljin said, “We have overcome the initial difficulties and have raised the proficiency of local employees, but it is obvious that the SK plant will come in the same place.” “No,” he said. At the time, SK said, “It is only a situation where the local state government is reviewing the suitability of the site for the land proposed first.” “It is not the land we chose first. It is unreasonable to pretend that Iljin’s staff and technology are being taken away.”
The controversy at that time was also brought up in last year’s national audit of the Ministry of Trade, Industry and Energy. Lee Seong-man and Democratic Party member commented on the controversy and said, “There is a possibility that there is a problem related to the transfer of technology or the transfer of workers from Iljin to SKC. In the meantime, companies are spending money for future investments, and government measures are needed to prevent this from happening.”
ILJIN “Competition in good faith”, SK is the cause of “ESG management”
Eventually, the controversy ended when SK decided to locate a new factory in Kota Kinabalu, 1000 km northeast of Kuching. Iljin said, “I have never objected to SK’s entry into Malaysia. Now, we can compete in good faith in the field of battery materials.”
SK’s copper foil. Photo SK Nexilis
SK is in a position that it is not a decision conscious of ILJIN’s backlash. SKC said, “The realization of’RE100′, which can use 100% of the power used by the plant as renewable energy, was in Kotanicabalu.” SKC cited the region’s wealth of renewable energy resources such as hydroelectric power, the presence of ports and airports necessary for export, and the excellent gas and water base as the reasons for its location decision.
With this, SK made the name of strengthening ESG (environmental, social, governance, and other non-financial factors as the core management principle), emphasized by Chairman Tae-won Choi. This is an industry evaluation. SK Nexilis CEO Kim Young-tae said, “We will solidify our best technology to produce the world’s thinnest copper foil for batteries in the longest and widest range.” .
Reporter Sunwook Choi [email protected]