EcoPro BM held a shareholder meeting on July 16 at NH Investment & Securities in Yeouido, Seoul, addressing concerns over its 1.2 trillion won capital increase. CEO Kim Jang-woo stated the company must directly invest in an Indonesian nickel smelter to secure cost and contract competitiveness as battery and automaker clients increasingly value raw material procurement capabilities. The company announced the capital increase on the 30th of last month, allocating 765 billion won to the BNSI nickel smelter in Indonesia's IGIP industrial complex.
EcoPro BM CEO Explains Direct Nickel Investment Strategy
CEO Kim Jang-woo addressed shareholder questions about why EcoPro BM—the cathode materials subsidiary—is directly investing in nickel refining rather than the holding company or precursor affiliate EcoPro Materials. "Recently, our clients including battery companies and automakers view raw material procurement capability as a critical competitive advantage," Kim stated. "Cathode material companies must also directly secure nickel supply chains to enhance cost competitiveness and win new contracts."
Kim explained that while business previously followed value chain sequences, competition has intensified to the point where battery and automaker companies now directly secure mines and raw materials. He noted that as each EcoPro Group affiliate maintains independent boards and shareholder structures as listed companies, EcoPro BM requires its own nickel supply chain to improve corporate value and profitability.
Minority shareholder platform 'Act' previously raised concerns that the capital increase transaction structure could harm shareholder value, requesting detailed explanations for why the cathode materials company is directly investing in nickel refining operations.
Company Plans Production Capacity Expansion in Indonesia and Hungary
Through this investment, EcoPro BM will expand the Indonesian smelter's production capacity from 66,000 tons annually to 90,000 tons, with commercial operations beginning in Q2-Q3 next year. The company also plans to increase Hungary plant production capacity from the current 54,000 tons to 60,000 tons.
CEO Kim stated that capital increase proceeds will not be used for debt repayment but will be allocated to investments that enhance future shareholder and corporate value. "Once the capital increase stabilizes our financial structure, our external funding capacity will expand, broadening our investment options," Kim said. He added that considering the scale and timing of the Indonesian investment, a paid-in capital increase represents the most appropriate method to simultaneously pursue financial structure improvement and investment.
CEO Clarifies FSS Securities Filing Correction Request
Regarding the Financial Supervisory Service's recent request for corrections to the securities filing, CEO Kim stated, "We do not view this as a directive to reduce the capital increase scale." He explained, "We understand this as a request to provide more detailed descriptions in the securities filing so investors can fully understand the content. We plan to submit a corrected filing that faithfully reflects the FSS's requirements."
FAQ
Why is EcoPro BM directly investing in a nickel smelter instead of through its holding company?
CEO Kim Jang-woo stated that battery and automaker clients now view raw material procurement capability as critical competitive advantage, requiring cathode material companies to directly secure nickel supply chains for cost and contract competitiveness. As EcoPro BM maintains an independent board and shareholder structure as a listed company, the subsidiary requires its own supply chain to improve corporate value.
When will the Indonesian nickel smelter begin commercial operations?
The company plans to begin commercial operations at the Indonesian smelter in Q2-Q3 next year, with production capacity expanding from 66,000 tons annually to 90,000 tons through this investment.
What did the CEO say about the Financial Supervisory Service's correction request?
CEO Kim stated the company does not view the FSS correction request as a directive to reduce the capital increase scale, but rather as a request to provide more detailed descriptions in the securities filing for investor understanding.
