Published : Sept. 23, 2013 - 21:13
This is the sixth in a series of articles about promising foreign-invested companies. ― Ed.
The future market for rechargeable battery materials will be centered in Asia, according to Eric Van den Broeck, the general manager of Umicore Korea Ltd.
Van den Broeck joined Belgium-based Umicore Group in 2002 and Umicore Korea Ltd. in 2010.
Belgium-headquartered Umicore Group, a global materials technology and recycling company, has been listed on the NYSE and Euronext Brussels with a market capitalization of some 4.5 billion euros ($6.1 billion) as of December 2012. One in 5 batteries worldwide contains Umicore materials, according to the company. It has four business groups ― catalysis, recycling, energy materials and performance materials ― and activities in Korea focus in catalysis (automotive catalysts) and energy materials (rechargeable battery materials).
Umicore Korea operates one of the firm’s three research and development facilities, with the others in Japan and Belgium. In 2006, the headquarters moved its Canadian R&D center to Cheonan, South Chungcheong Province, because Korea has more large-scale manufacturers of rechargeable batteries. At the moment, there are no plans to expand R&D facilities to China, Van den Broeck said.
Eric Van den Broeck (right), the general manager of Umicore Korea Ltd., introduces the company to a team of international student ambassadors of Invest Korea, at the Umicore R&D center in Cheonan, South Chungcheong Province, on Sept. 6. Invest Korea is a foreign investment consulting unit of the state-run Korea Trade-Investment Promotion Agency. (Park Hyun-koo/The Korea Herald)
When asked about the headquarters’ investment plans, he said, “I think Korea is actually at the center of our business strategy (for rechargeable battery materials).”
Umicore Korea has its R&D center and manufacturing plant in a combined facility complex, now with an extra factory that was completed about 2 kilometers away from the original Cheonan site. Other manufacturing plants are located in Japan and China.
“If you look at the future plan we have in Asia ― they (future strategies) will be centered in Asia, that is for sure ― the major part of the investment, as we see it now, will be done in Korea,” he added. But he declined to mention specific figures.
The two Asian operations’ major portfolios are rechargeable battery materials: refined metals such as cobalt, lithium and nickel. Manufacturers of smartphones, rechargeable portable electronics and electric cars are the company’s major buyers.
“The R&D center (for rechargeable battery materials) in Korea is about five times bigger than that in Japan. The main center is actually here,” Van den Broeck stressed. About 250 people work in the Cheonan facilities of Umicore Korea, with about 50 employees engaged in the R&D unit.
The headquarters selected Korea as the first R&D site in Asia. The Japanese market was harder for Umicore to enter, he said, as local companies already had a firm grip on the market share. The labor cost was higher in Japan than in Korea, whereas the level of trained workers was the same.
When asked about the damage that Umicore Japan could have suffered during the Fukushima nuclear incident in March 2011, Van den Broeck denied any such damage, citing distance.
“The unusual part here is that many Korean companies unexpectedly profited from the incident, because that was when some Japanese companies realized that they need some suppliers who are outside Japan as well,” he said.
Some Japanese manufacturers who would only seek local suppliers became more open to foreign suppliers, he said.
Van den Broeck picked the protection of intellectual property and rising operation costs as the two largest challenges in doing business in Korea.
The critical distinction between Umicore and its rival companies is its recycling technology ― refining the used battery materials to produce pure elements ― that no other company has. Besides such cutting-edge skills, this recycling technology involves some 50, 60 years of experience in metals, the general manager said. This futuristic technology can recycle the materials perpetually, adding to the innovation of people’s everyday lives.
This was possible because Umicore started as a colonial mining operation in the early 20th century. Then called Union Miniere, meaning “mining union,” the company changed its name to “Umicore” in 2003.
“We wanted to change from the old names because those mines had already been gone for some 50 years, but people would still think that we were mining people,” he said. He emphasized that Umicore is a materials technology company now.
Protecting intellectual property is crucial for the company, Van den Broeck stressed, since about 50 percent of Umicore’s products stay on the market for three to five years and then are replaced by new, more advance products, meaning that the company has relatively short period to recuperate the R&D costs for each product. Having leaks before or during the recuperation period would be particularly critical, he asserted.
“We mainly play in the high-end market and spend very high R&D costs, meaning that we have lots of intellectual properties to protect,” he said.
Rising costs in energy ― one of the major advantages that Korea had over Japan and China ― and labor are among the concerns that the company has been undergoing.
“But it is natural that the labor costs go up, since it reflects the level of living standards,” Van den Broeck suggested.
By Chung Joo-won (joowonc@heraldcorp.com)