Kim Jang-woo, CEO of EcoProBM, announced on July 16 during a shareholders' meeting in Yeouido, Seoul, that the company will proceed with a planned capital increase of 1.2 trillion won. Despite requests for clarification from the Financial Supervisory Service and a recent decline in stock prices, the company intends to invest in its nickel refinery in Indonesia and production facilities in Hungary and Pohang to secure cost competitiveness and future growth.
Kim stated, "Considering the company's financial situation and the necessary investment scale, we believe that a capital increase is the most suitable funding method at this time. The raised funds will be fully utilized for growth investments and business operations, not for debt repayment, to enhance future corporate and shareholder value."
He added, "The request from the Financial Supervisory Service is not to reduce the capital increase but to provide more detailed explanations regarding investment risks and the use of funds."
Kim also expressed confidence that preparing the revised report would not take 10 to 20 days, estimating it could be submitted within a week to ten days. He noted that the schedule for the capital increase was established with some consideration of potential requests for clarification, predicting limited impact on the existing timeline.
Of the 1.2 trillion won raised through the capital increase, EcoProBM plans to allocate 765 billion won to secure a stake in the Indonesian nickel refinery. The company will invest 150 billion won each in enhancing the competitiveness of its Hungary and Pohang facilities, with the remaining 135 billion won earmarked for operational funds needed for production expansion.
The investment in the Indonesian refinery aims to secure nickel, a significant component in cathode material, at a low and stable cost. EcoProBM plans to acquire a 39% stake in the refinery, becoming the largest shareholder and a key participant in its operations.
The refinery is expected to begin commercial operations in the second to third quarter of next year, producing 40,000 to 50,000 tons in its first year and 80,000 to 90,000 tons annually from the following year. The company anticipates that if nickel prices exceed $16 per kilogram, it will generate sufficient profits, and if prices rise above $18 around 2030, it could achieve an operating profit margin of about 25%.
For the Hungary plant, EcoProBM plans to invest 900 billion won in facility upgrades, production capacity expansion, and automation, while allocating 600 billion won for operational funds. The company aims to increase its current production capacity from 54,000 tons to approximately 60,000 tons and expand sales from 10,000 tons this year to over 30,000 tons next year and 50,000 tons in the following year. Kim emphasized that the Hungary plant is a key hub for responding to local production regulations in Europe and aims to quickly increase operational rates by linking with local battery manufacturers such as Samsung SDI and SK On, as well as major automakers' supply chains in Europe.
The 150 billion won investment in the Pohang plant will be used to modify existing high-nickel production lines for high-voltage mid-nickel product production and to establish facilities for solid-state battery materials and automation. Currently, the operational rate of the Pohang plant is around 40%. The company is working on modifying existing idle facilities for mid-nickel and solid-state material production.
Kim also emphasized that the company aims to achieve visible results in new orders by the end of the year. EcoProBM has secured 2 to 3 new orders for high-nickel products from domestic and international clients, with some already in preparation for mass production or having started actual production. He noted, "We are also conducting prototype tests and discussions on specific mass production schedules for high-voltage mid-nickel products with domestic and international battery manufacturers and global automakers."
EcoProBM plans to increase its cathode material sales from approximately 70,000 tons last year to 230,000 tons by 2030. Based on this, the company aims to achieve about 9 trillion won in sales from the cathode material business and approximately 2.5 trillion won from the nickel refining business, targeting over 10 trillion won in consolidated sales and 1 trillion won in operating profit.
During the meeting, some shareholders expressed concerns regarding the capital increase and delays in new orders. One shareholder remarked, "We have been hearing about new orders for years, but there are no visible results. Could we reduce the capital increase by lowering our stake in the Indonesian refinery?"
In response, Kim acknowledged the disappointing stock performance, saying, "I feel responsible as the head of the company." However, he explained that the stake in the refinery was negotiated down from an initial 45% to 39%, which is necessary for effective management participation as the largest shareholder.
He further stated, "I take the shareholders' concerns about the lack of concrete results from new orders seriously. We are currently in the stage of producing prototypes for customer testing, and we will deliver visible results related to new orders within this year."
* This article has been translated by AI.
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