L&F completes 40,000-ton precursor plant at Saemangeum; commercial operation set for Q4

L&F said Thursday that LS-L&F Battery Solutions (LLBS), its joint venture with LS Group, has completed construction of a nickel-cobalt-manganese (NCM) precursor production facility with an annual capacity of 40,000 tons at the Saemangeum National Industrial Complex in North Jeolla Province.

LLBS will begin commercial operation in the fourth quarter of this year. The milestone completes L&F's vertically integrated value chain spanning from precursor materials to cathode active materials, enabling the company to manage the full production process from raw material procurement through finished output — a move expected to reduce costs and improve profitability.

The electric vehicle (xEV) market has been showing a gradual recovery, while the energy storage system (ESS) market is entering a phase of structural growth. In this environment, supply chain stability and regulatory compliance capability for battery materials have become key evaluation criteria for major customers.

LLBS is expected to significantly strengthen L&F's ability to serve global customers, particularly in North America and Europe, by establishing a Non-Prohibited Foreign Entity (Non-PFE) supply chain. The US Senate budget bill, the One Big Beautiful Bill Act (OBBBA), restricts tax credits for supply chains linked to prohibited foreign entities (PFEs) such as China, while offering tax benefits based on the proportion of raw materials and components sourced from non-PFE suppliers. With a domestic precursor supply chain now secured, L&F expects the development to have a positive impact on winning new orders and diversifying its customer portfolio going forward.

LS Group brings to the venture its global business capabilities and raw material procurement expertise accumulated in the nonferrous metals and power and energy sectors, giving it a competitive edge in the secondary battery materials industry as well. L&F views these strengths as the core foundation for building a vertically integrated value chain linking nickel sulfate, precursors and cathode active materials.

L&F has maintained high utilization rates even amid the current slowdown in the electric vehicle market and has continued to post steady earnings improvements. By bringing precursor production in-house, the company has reduced its external dependence and further reinforced the stability of its business structure.

"LLBS is a project that plays a central role in our medium- to long-term growth strategy, providing the foundation to secure both cost competitiveness and supply chain stability simultaneously," L&F Chief Executive Heo Je-hong said. "Through collaboration with LS MnM, we will build a production system spanning from raw materials through precursors to cathode active materials, and continue pursuing a growth strategy that delivers a win-win outcome for both companies."

He added that the company would "concentrate all corporate capabilities — technology, personnel and capital — to maximize LLBS's initial competitiveness and differentiation, and realize sustained growth and enhanced corporate value by proactively responding to global customers' precursor demand."

Meanwhile, L&F has been actively expanding its global footprint, including by building a smart factory system that automatically calculates and manages carbon emissions and quality data, as it works to comply with tightening global ESG (environmental, social and governance) regulations such as the EU's mandatory digital battery passport requirement.