Ecopro BM is moving to switch production lines to target the European automaker market. Ecopro BM said on Sunday it has begun work to convert the Hungary plant's existing NCA line for NCM supply, in order to supply high-nickel cathode materials for premium electric vehicles in Europe from the fourth quarter of next year.

About 40 billion won is expected to be spent on the line conversion. The Hungary plant, which entered commercial operation in the first half of this year, has annual production capacity of 54,000 tons and is currently operated as an NCA line using nickel, cobalt and aluminium as raw materials. Ecopro BM is placing equipment orders and carrying out shipping work to convert the line into a mixed-use line that can also produce NCM using nickel, cobalt and manganese as raw materials.

Earlier, Ecopro BM explained the status of its European business at a corporate briefing for individual investors held on Aug. 21 at the headquarters of NH Investment & Securities in Yeouido, Seoul. It said it had begun investment to convert the Hungary plant to supply high-nickel cathode materials to a German premium automaker.

At a site of about 440,000 square meters in Debrecen, Hungary, Ecopro BM, which produces cathode materials, Ecopro Innovation, which handles lithium processing, and Ecopro AP, which produces industrial oxygen and nitrogen, are located. Ecopro BM's cathode material production capacity totals 54,000 tons a year across 3 lines, enough to supply about 600,000 electric vehicles. Ecopro Innovation supplies 8,000 tons of lithium hydroxide a year, while Ecopro AP supplies 16,000 cubic meters of oxygen per hour.

The Hungary plant began mass production by starting up line 1 in June and is set to start up line 2 in September. The company said it aims for annual output of about 10,000 tons this year and expects it to expand to as much as 30,000 tons next year. Ecopro BM has also said in its second-quarter results conference call that it aims to shift to a quarterly profit structure in the second half through higher volumes, line stabilisation, improved operating efficiency and cost cuts, and then target results above the annual break-even point.

Over the medium to long term, the company predicted that volumes at its Hungary unit will continue to expand as the trade agreement between the European Union and Britain and procurement requirements for locally sourced supply by the European automaker industry align. The high-nickel cathode materials for Europe that Ecopro BM will produce have a nickel share exceeding 90 percent. It expects order opportunities from automakers to expand on the back of cost competitiveness, as the Ecopro Group secures nickel stably through the BNSI smelter it is building in Indonesia.

Kim Jang-woo (김장우), head of management at Ecopro BM, said the Hungary unit is expected to enter a full-fledged shift to profitability from the fourth quarter. "Based on a stable supply chain, we will strengthen partnerships with European automotive OEMs and also speed up improvements in profitability," he said.