Korean firms Toray Industries and LG Chem have concluded a joint venture agreement to create a lithium-ion battery separator firm in Hungary.
The agreement sets out plans to establish LG Toray Hungary Battery Separator Kft. (LTHS), in which Toray and LG Chem will each hold a 50% interest.
Under this arrangement, LG Chem will invest $375 million (around ¥43 billion) in Toray Industries Hungary (THU), a 100% subsidiary of Toray engaged in the manufacture and sales of battery separator film.
The deal is due to be finalised next year, subject to fulfilling regulatory requirements.
The new joint venture will use existing THU facilities to manufacture battery separator film for automotive lithium-ion batteries for sale to LG Group in Europe and the US.
To cater to projected demand growth, Toray and LG Chem have agreed to expand film substrate production facilities and install new coating facilities at the existing THU location.
Toray has agreed to sell 20% of its stake in LTHS to LG Chem two and a half years after launching the joint venture. LG Chem would then manage joint venture operations.
LTHS will license from LG Chem and Toray the technologies necessary to produce separators for LG Group lithium-ion batteries.
The joint venture should also secure stable customers and expand operations by drawing on the LG Group’s business model, which vertically integrates everything from battery materials through battery production.
The Toray Group will continue to develop, manufacture, and supply battery separator film and coating in Japan and Korea to meet customer needs.