Korea Zinc to invest $146 mn in green business R&D hub

Korea Zinc Inc., South Korea’s and the world’s No. 1 lead and zinc smelter, will build its second research and development center, which will aid the company’s push for new growth drivers – eco-friendly and next-generation materials businesses – in Incheon, adjacent to Seoul, by 2027.

According to the company’s announcement on Sunday, its new R&D center will be located in Songdo, or Songdo International Business District, Incheon, about 40 kilometers west-southwest of Seoul, Korea’s capital city.

Korea Zinc has already begun designing the new R&D hub with multiple facilities and this year aims to gain construction plan approval for the center to sit on a total floor area of 29,444 square meters to break ground on it next year. It plans to complete the center's construction by April 2027.

The company currently runs one R&D center in Onsan, Ulsan in the southeast corner of the Korean peninsula.

While the existing center focuses on the company’s mainstay business of non-ferrous metals, the new R&D center will focus on new growth engines beyond non-ferrous metals – battery materials, new renewable energy and green hydrogen materials, material recycling and next-generation material technologies.  

It plans to hire about 200 new R&D personnel, about double the staff at the Onsan R&D center, and invest about 200 billion won ($146 million) in total for the Songdo R&D hub.

The new R&D center is part of the company’s long-term plan to foster eco-friendly material businesses as its new growth driver under the direction of the company’s Chairman Choi Yun-Birm.

Choi, the third-generation leader from its founding family, has been aggressively pursuing new growth engines since he took the helm of Korea Zinc in 2019. He became chairman in 2022.

TROIKA DRIVE BEYOND NON-FERROUS METALS

The company in December last year announced a plan to more than double its revenue to 25.3 trillion won from 2023 to 2033 by bolstering its so-called Troika Drive businesses – renewable energy and green hydrogen, battery materials and resource recycling.

Korea Zinc raked in 9.7 trillion won in consolidated sales for 2023, down 13.5% from the previous year, and its combined operating profit fell 28.3% to 659.1 billion won over the same period.

Non-ferrous metal smelting business currently accounts for nearly 99% of its entire revenue.

As part of its long-term plan to bolster Troika Drive businesses, Korea Zinc pledged to invest 12 trillion won in the new growth drivers from 2024 to 2033.

The Troika Drive aims to leverage Korea Zinc’s metal extraction know-how to bolster the company’s green energy material businesses.

The company expects the new businesses to bring in more profit than its current mainstay non-ferrous metal smelting business.

HUNT FOR TALENT AND M&A OPPORTUNITIES

To bolster the R&D capabilities of the new center, Korea Zinc plans to fill half of the new 200 staff with those holding master’s and doctorate degrees in their respective new growth areas, the company said.

The company expects the new R&D center's location near Seoul will help it easily lure skilled experts.

It will also keep looking for merger and acquisition targets abroad that are expected to create synergy with the new R&D center.

In July 2022, Korea Zinc acquired a 73.21% stake in Igneo Holdings LLC, a US-based electronic waste recycling company, for $332 million.

Last month, it took over the entire stake in Kataman Metals LLC, a US-based scrap metal trading company, for $55 million to expand its recycling business.

It also runs two Australian affiliates – Ark Energy, a sister company of Australian zinc producer Sun Metals, which is part of Korea Zinc, and the country’s largest renewable energy developer Epuron acquired in 2021. They play a key role in leading its major renewable energy and hydrogen projects.

In 2018, Korea Zinc also teamed up with Korean chemical giant LG Chem Ltd. to set up the nickel sulfate-producing joint venture Korea Energy Materials Co. (KEMCO), which also set up a precursor-producing JV, Korea Precursor Co., with LG Chem in 2022.

LG Chem is the parent company of Korea’s largest electric vehicle battery maker LG Energy Solution Ltd.

Write to Sang Hoon Sung at uphoon@hankyung.com


Sookyung Seo edited this article.