Lotte Energy Materials will sell its stake in unit Lotte Ecowall and focus on strengthening competitiveness in its copper foil business. The company said on Thursday it signed a share purchase agreement with Realsun Private Equity and decided to dispose of 90% of its stake in Lotte Ecowall. It plans to use the sale proceeds to fund investment in a portfolio of four high value-added products: circuit foil for artificial intelligence data centres, ultra-thin foil for semiconductors, battery foil for energy storage systems and battery foil for electric vehicle batteries.

Lotte Ecowall is South Korea's top company in the curtain wall sector. It posted about 130 billion won in revenue and about 12 billion won in operating profit last year. Earnings before interest, taxes, depreciation and amortisation margin exceeds 10 percent. The company is a profitable business with cash generation capability, but Lotte Energy Materials decided to sell it to revamp its business portfolio around future materials, it said.

The company said it will raise the share of high value-added products through the sale and expanded production. At its Iksan plant in South Korea, it is pushing to expand its production line for AI circuit foil. Existing capacity was 3,700 tons and it aims to increase that to 16,000 tons by 2027. At its Malaysia plant, it plans to increase production of battery foil for energy storage systems and lay the foundation this year for a structural turnaround.

With performance in its core businesses becoming visible, first-quarter results also improved. As expectations for a turnaround rose, brokerages raised their target prices for Lotte Energy Materials by up to 70 percent.

A Lotte official said, "Lotte's chemical affiliates are carrying out business restructuring to strengthen fundamental competitiveness." The official said the group is continuing to reshape its domestic basic materials business and wind down non-related businesses, while focusing on expanding functional materials and high value-added businesses to speed up a shift in its business model toward advanced-technology materials.