Ecopro BM targets W11tr in sales by 2030, eyes Europe with rights offering proceeds

Rights offering of 1.2 trillion won to fund Indonesia, Hungary investments

2030 operating profit target of 1 trillion won; nickel business to account for half

Low-cost nickel to sharpen cost and order competitiveness

Hungary factory to anchor expanded EV and battery partnerships

Ecopro BM CEO Kim Jang-woo speaks at a shareholder briefing held Thursday at NH Investment & Securities headquarters in Yeouido, Seoul, outlining the company's investment plans for an Indonesian nickel smelter.

Ecopro BM said Thursday it aims to achieve sales of 11 trillion won ($7.39 billion) and operating profit of 1 trillion won by 2030, funded by proceeds from a planned rights offering. The company plans to secure cost competitiveness by acquiring a stake in an Indonesian nickel smelter while aggressively targeting the European electric vehicle market through investment in its Hungarian factory.

Speaking at a shareholder briefing at NH Investment & Securities headquarters in Yeouido, Seoul on Thursday, CEO Kim Jang-woo said "the battery market is currently seeing fierce competition between lithium iron phosphate batteries and ternary batteries," adding that the company would "secure cost competitiveness and expand orders through investment in the Indonesian nickel smelter."

765 billion won for Indonesian smelter, 150 billion won for Hungary factory

Ecopro BM's 2030 earnings targets. [Ecopro BM]

Ecopro BM had earlier announced a 1.2 trillion won rights offering to fund investment in the Indonesian nickel smelter and its Hungarian production factory. The new shares consist of 9.9 million common shares, equivalent to 10.1 percent of total shares currently outstanding. Ecopro, Ecopro BM's largest shareholder, plans to subscribe for up to 120 percent of its allotted shares to support the fundraising.

Ecopro BM plans to use 765 billion won of the proceeds to acquire a stake in the BNSI smelter in Indonesia, raising its holding to 39 percent to secure majority shareholder status. An additional 150 billion won will go to the company's cathode material factory in Debrecen, Hungary, which began mass production in June and can produce 54,000 tonnes of cathode material annually across three lines.

The company targets sales of 11.5 trillion won and operating profit of 1.02 trillion won by 2030. Of total sales, the cathode material business is expected to account for 9 trillion won and the nickel business for 2.5 trillion won. The nickel business is projected to contribute an even larger share of operating profit — 530 billion won — compared with 490 billion won from the cathode material business.

Kim said "securing a 39 percent stake will mean the full profit and loss of the BNSI smelter is reflected in Ecopro BM's consolidated earnings," adding that "cathode material sales are planned to expand to 234,000 tonnes by 2030."

Targeting non-China demand; nickel production capacity to expand to 90,000 tonnes

Construction site of the BNSI smelter in Indonesia. [Ecopro BM]

Ecopro BM expects its investment in the Indonesian nickel smelter to improve the cost competitiveness of its cathode materials. Korean-led ternary batteries and Chinese LFP batteries are competing in the global battery market. Ternary batteries outperform LFP but carry higher production costs. Through the smelter investment, Ecopro BM aims to secure nickel — which accounts for a large share of ternary battery production costs — at low cost.

Indonesia is one of the world's largest nickel producers, and the investment carries strategic significance by helping expand a non-China supply chain. North American and European markets impose tariffs or restrict tax credit benefits when Chinese-origin materials are used, including requirements tied to non-prohibited foreign entity status. Ecopro BM will expand its nickel production capacity from an originally planned 66,000 tonnes per year to 90,000 tonnes annually — enough to supply about 2 million electric vehicles — securing a stable production base.

Kim said "Indonesia is the place where nickel can be produced most cheaply anywhere in the world," and expressed confidence that "entering the smelting business will allow us to secure an overwhelming cost advantage." He added that "automakers are increasingly reaching out directly to materials companies," and that "securing the supply chain will also contribute to winning orders."

The Hungary factory is set to serve as a base for targeting the European market through further facility investment. The Debrecen cathode material factory, which began mass production in June, can produce 54,000 tonnes of high-nickel nickel-cobalt-aluminum, or NCA, cathode material per year across three lines. Ecopro BM also plans to build a dedicated nickel-cobalt-manganese, or NCM, line to deepen partnerships with battery cell makers and original equipment manufacturers.

Kim said there is demand from customers in Hungary "to produce a variety of products beyond NCA cathode materials," and that the company "plans to proceed with line conversion and automation investment." He added that the company is targeting sales of 230,000 tonnes of cathode material by 2030, and that it "plans to use the European base to expand direct collaboration not only with new battery cell makers but also with automakers."

Ecopro BM's factory in Hungary. [Ecopro BM]

On FSS correction request: 'No change to rights offering schedule or amount'

On the Financial Supervisory Service's request for a corrected filing, the company said it would address the issues promptly and proceed with the rights offering as planned. The FSS said certain material disclosures in the securities registration statement were unclear in a way that could impede rational investment decisions or cause significant misunderstanding among investors, and called for corrections.

Kim said the FSS request was intended "to have the contents of the securities registration statement described in greater detail so that shareholders face no issues when investing," and said the company "intends to submit a revised securities registration statement within 10 days."

eyre@heraldcorp.com