L&F is accelerating its precursor localization efforts in partnership with LS Group.
L&F announced on July 9 that it has completed the establishment of a 40,000-ton annual NCM (nickel, cobalt, manganese) precursor production facility within the Saemangeum National Industrial Complex through its joint venture, LS-L&F Battery Solutions (LLBS), and is preparing for commercial operations in the fourth quarter of this year.
The precursor is a key intermediate material that constitutes a significant portion of the cost of cathode materials. Currently, the domestic battery industry relies heavily on Chinese precursors, raising concerns about supply chain stability and price competitiveness.
Once LLBS begins full operations, L&F will complete its vertical integration value chain from precursor to cathode materials. This will enable the company to manage the entire value chain from raw material procurement to production, leading to cost reductions and improved profitability.
The electric vehicle (xEV) market is showing signs of gradual recovery, while the energy storage system (ESS) market has entered a phase of structural growth. In this environment, the stability of the battery materials supply chain and the ability to respond to regulations are key evaluation factors for major customers.
Establishing a Non-PFE (non-prohibited foreign entity) based precursor supply chain through LLBS is expected to significantly enhance L&F's responsiveness to global customers, particularly in North America and Europe. This is anticipated to positively impact future order expansion and diversification of the customer portfolio.
Despite a slowdown in the electric vehicle market, L&F has maintained a high operating rate and continues to show stable performance improvements. The localization of precursors will further reduce external dependencies and strengthen the stability of its business structure.
Heo Je-hong, CEO of L&F, stated, "LLBS plays a crucial role in our mid- to long-term growth strategy, providing a foundation for securing both cost competitiveness and supply chain stability. We plan to build a production system that connects raw materials, precursors, and cathode materials through collaboration with LS MnM, continuously enhancing our competitive edge in the global market."
* This article has been translated by AI.
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