Published : Sept. 8, 2016 - 14:07
[THE INVESTOR] TOKYO -- Japanese battery makers are rushing to ramp up investment in Korean plants to increase production as more carmakers are pledging to go electric, according to Japan’s Nihon Keizai Shimbun on Sept. 7.
Toray, which supplies to both Panasonic and LG Chem, will invest 20 billion yen (US$196.65 million) to increase production of insulators, a key element in lithium batteries -- used in electric cars -- by 70 percent. Sumimoto Chemical, a supplier for electric car battery maker Panasonic, is also investing 20 billion yen in its Korean plant to increase production of battery materials by fourfold to 400 million square meters by the 2018.
The latest investment expansion plans by Japanese material makers come as the era of electric cars appears to be drawing closer.
Germany’s Volkswagen has decided to go fully electric, while the Chinese government is offering subsidies to encourage the supply of electric cars.
Market tracker IHS Automotive says global sales of electric cars are expected to reach 256 million by 2025, up from 350,000 in 2015. And the lithium-ion battery materials market is expected to grow in tandem, surging 2.4-fold to 2020 compared to last year.
As the materials for building such batteries need to be safe and secure, Japanese suppliers may have an advantage over their cheaper Chinese rivals, according to the Nihon Keizai Shimbun.
Based on such anticipation, manufacturers such as Asahi Kasei, Mitsubishi Chemicals and Sumitomo Metal Mining are all planning to increase their production capacity over the next couple of years, the publication reported.
By Kim Ji-hyun/The Investor correspondent (jemmie@heraldcorp.com)