Toray Industries, Inc. has announced the establishment of a joint venture (JV) with LG Chem, LG Chem Ltd., in which Toray and LG Chem each hold a 50% interest, following the announcement on October 27, 2021 that Toray had concluded an agreement with LG Chem to form a battery separator film joint venture in Hungary.
Toray and LG Chem have established the joint venture through the investment of $375 million (around ¥ 50 billion) by LG Chem in Toray Industries Hungary Kft. (THU), a wholly owned Toray subsidiary which manufactures and sells separator film for rechargeable lithium-ion batteries in Hungary.
In the first quarter of the fiscal year ending March 31, 2023, Toray expects to post a consolidated gain of around ¥19.0 billion (net of tax) associated with revaluation of the interest in THU as a result of the creation of the joint venture. Toray will promptly announce any revisions to its consolidated forecasts for the six months ending September 30, 2022 or for the full year ending March 31, 2023, once they are considered necessary in view of the impact of this joint venture formation or other circumstances.
The plant will be established on the site of the existing Toray Industries Hungary Kft plant, located in the city of Nyergesújfalu in the Komárom-Esztergom province in northwestern Hungary. The total area is 420,000m2, which is the size of more than 60 football stadiums.
The two companies plan to secure an annual production capacity of more than 800 million square meters until 2028.
Line expansion will begin in the first half of next year. The mass-produced separators will be supplied to European battery companies such as LG Energy Solution Polish plant in Borzwaf, Poland
Toray wished to secure a stable customer base within Europe through LG Energy Solution, a subsidiary of LG Chem, while LG Chem wished to rapidly penetrate the European market, which is the global electronic vehicle production hub, by internalizing the fabric technology, a key material of separators.
Through the joint venture, Toray has secured a concrete customer base in the European market, while LG Chem will be able to further strengthen its position as a global separator company by adding Toray's differentiated fabric business capabilities to its coating technology.
Through the joint venture, the two companies have secured the opportunity to penetrate the fast-growing European electronic vehicle market