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SK Innovation considering to spin off and list its growing battery business

August 17/2021

MOSCOW (MRC) -- South Korea's SK Innovation Co Ltd said it is considering spinning off and listing its growing battery business, taking a page out of rival LG Chem Ltd's playbook that is on track to list its battery unit this year, reported Reuters.

The move, announced by SK Innovation CEO Kim Jun earlier this year, comes as demand for electric vehicles (EVs) surges and carmakers partner with battery makers to ensure uninterrupted supplies.

"We haven't decided how to split the battery business ... it takes quite a lot of resources to further grow our growing battery business, so we are considering the spin off as one of the ways to secure resources," Kim said, adding he will review whether to list only on Nasdaq or opt for a dual listing in the United States and South Korea.

SK, which supplies batteries to Ford Motor Co , Volkswagen AG, Hyundai Motor Co and among others, also said it aims to increase its annual battery production capacity to 200 gigawatt-hours (GWh) in 2025, up 60% from a previously announced goal of 125 GWh. Its current capacity is 40 GWh.

Analysts said without the battery business, SK Innovation would just be left with its conventional petrochemical business, which investors do not find as attractive.

In September, LG Chem said it would separate its battery business, which supply batteries for Tesla Inc and General Motors Co, into a new company, LG Energy Solution. Shares of LG Chem have jumped more than 30% since September, buoyed by its chemical business due to strong material demand.

LG Energy Solution last month applied for preliminary approval for an initial public offering (IPO) that publication IFR said could raise USD10 billion - USD12 billion.

As MRC informed earlier, in March 2021, SK Innovation announced its intention to build a plant in Wojewodztwo Slaskie, Poland that will manufacture Lithium-Ion Battery Separators (LiBS) and Ceramic Coated Separators (CCS).

We remind that in July 2021, SK Innovation Co Ltd said refining margins were likely to gradually improve in the second quarter due to recovering demand as the impact of COVID-19 eases.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
Author:Margaret Volkova
Tags:crude and gaz condensate, propylene, ethylene, car components, batteries, petrochemistry, Ford Sollers, LG Chem, SK Corporation, Volkswagen, South Korea.
Category:General News
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