By Joyce Lee and Heekyong Yang
SEOUL (Reuters) -South Korean chemical and battery material maker Posco Future M Co Ltd said on Monday it is targeting 43 trillion won ($32.57 billion) in sales by 2030, as demand for batteries for electric vehicles is expected to rise throughout this period.
Posco Future M, which supplies to battery cell makers LG Energy Solution (LGES), Samsung SDI and Ultium Cells, a joint venture of General Motors and LGES, said it targets an operating profit of 3.4 trillion won by 2030.
In 2022, the company reported 3.3 trillion won in revenue and 166 billion won in operating profit.
To achieve its targets, Posco Future M said it plans to strengthen its ability to encompass entire lifecycle of battery materials from access to raw material mines, production to recycling, as well as take rapid investment decisions to expand global production capacity.
“We are close to confirming more orders with major customers regarding cathode materials (for batteries),” said CEO Kim Jun-hyung.
“We will drastically increase production capacity… through investing at a faster rate than we do now.”
In May, POSCO Future M said it plans to set up a 1.2 trillion won battery material joint venture with Zhejiang Huayou Cobalt in South Korea as part of the firm’s effort to strengthen its battery material supply chain management.
Separately in June, the company with its parent Posco Holdings Inc announced a 1.5 trillion won-battery material joint venture with CNGR.
Battery demand for vehicles in the United States grew by around 80% in 2022, despite electric car sales only increasing by around 55%, according to the International Energy Agency.
As the auto industry scrambles to produce more affordable EVs, whose most expensive components are batteries, lithium-iron-phosphate (LFP) batteries have been gaining traction. LFP batteries are less expensive than nickel-cobalt batteries.
Chinese cell makers, such as CATL and BYD, dominate the LFP battery market.
Posco Future M said last month it plans to annually produce 20,000 metric tons LFP cathode in 2025 and increase its LFP cathode production capacity by about 7.5 times to 150,000 tons by 2030.
Shares in Posco Future M have risen about 2.6 times year-to-date as of Monday.
($1 = 1,320.4000 won)
(Reporting by Joyce Lee and Heekyong YangEditing by Shri Navaratnam)