Battery production is currently an activity subject to prior assessment under the relevant government regulation.Continue reading
The South Korean parent companies of SK On Hungary, which has three battery factories in the country, are expected to merge in two phases: SK Innovation and SK E&S before the end of the year (November), and SK On, SK Trading International and SK Enterm are expected to merge early next year (February), Világgazdaság reports.
According to the newsportal, SK Group intends to ensure sustainable profitability and market leadership in the battery sector with this decision.
The East Asian company operates around 170 subsidiaries worldwide in four major business sectors. It currently has production facilities in Korea, China and Hungary – in Komárom (northern Hungary) and Iváncsa (central Hungary) – with an annual capacity of around 20 gigawatt hours (GWh). To meet world market demand for batteries for electric vehicles, SK plans to expand its production capacity to 125 GWh by 2025, partly through the Iváncsa battery plant in Fejér county, that is planned to produce 30 GWh.
This time, the merger will involve the companies operating in the energy and chemicals sector (SK On, SK E&S, SK Innovation) and the subsidiaries operating in the trading and storage sector (SK Trading International and SK Enterm).
The Iváncsa factory. Photo via Facebook/SK on Hungary
The new entity will both own and manage
The aim of the merger is to enable SK Group to respond in a timely and efficient manner to unexpected market changes, such as the current global downturn in demand for electric cars. Recently, executives of the Asian company said that “SK’s operations are stable even in difficult market conditions”.
They pointed out that they serve popular and well-established car brands such as
Their market capitalization grew by 36% in the first half of 2024, but recently there has been a significant drop in demand for e-cars, and as a result, orders from partners have also fallen.
Also in order to ensure sustainable growth, the group has decided to merge the global battery specialist SK On, the oil and petroleum products trading subsidiary SK Trading International and the trading and warehousing subsidiary SK Enterm. The parent company expects the merger to improve the availability of raw materials and improve the profit structure by approximately 500 billion South Korean won (EUR 339 billion).
Lee Seok-hee, CEO of SK On, stressed that the merger is a rational decision to ensure that the current difficulties do not hinder the long-term stable and profitable operation of the companies.
The three SK On factories in Hungary also expect a positive impact from the mergers of SK subsidiaries, which will clearly strengthen the company’s battery business, essential for future growth.
Via Világgazdaság; Featured image via Facebook/SK on Hungary
