[Market Power] EcoPro consolidates overseas operations under EcoPro BM

Oct 29, 2026, 04:39 pm

EcoPro has adopted a strategy of "selection and concentration" by consolidating its overseas production and raw materials businesses under EcoPro BM. The move is intended to speed up decision-making by bringing operations ranging from nickel refining to cathode material production under one company. However, with overseas subsidiaries swinging to losses after a year and EcoPro BM's own cash generation remaining volatile, the company's financial capacity to support the expansion is being put to the test.

According to disclosures filed with the Financial Supervisory Service's Data Analysis, Retrieval and Transfer System (DART) on Oct. 28, EcoPro BM's subsidiaries in the United States, Hungary and Canada, along with its Indonesian investment subsidiary, posted a combined net loss of 17.5 billion won in the first half of this year, reversing a net profit of 30.2 billion won a year earlier. The loss was more than twice EcoPro BM's standalone operating profit of 7.7 billion won over the same period.

Despite the losses, EcoPro has chosen to consolidate its overseas operations more closely under EcoPro BM rather than scale them back. The holding company plans to contribute its 18.35% stake in Indonesia's BNSI nickel smelter in kind to a special purpose vehicle, ECO SPV, to be jointly established by EcoPro and EcoPro BM. EcoPro BM will invest approximately 765 billion won in the vehicle, which will ultimately hold a 39% stake in BNSI.

In its executive reshuffle this month, EcoPro formally designated EcoPro BM as an intermediate holding company for its secondary battery materials business. Song Ho-jun, formerly CEO of EcoPro, was reassigned to EcoPro BM to oversee overseas production bases in Hungary and Canada, as well as the BNSI investment. Kim Jang-woo, who had led EcoPro BM, moved to the holding company to oversee group finances and management.

EcoPro BM owns 100% of its subsidiaries in the United States, Hungary and Canada, as well as a 51% stake in Indonesian investment company PT EcoPro ESG Investment. In 2024, it absorbed EcoPro Global, which had overseen the group's overseas operations, through a merger. In March this year, the company also added subsidiary management, equity investment support and financing assistance to its stated business purposes.

Managing operations from nickel refining to cathode material production under a single company could accelerate raw material procurement and investment decisions. However, concentrating overseas investments in one entity also means that EcoPro BM must shoulder the funding requirements until those businesses begin generating profits.

Market reaction has been less than favorable. On June 30, when EcoPro BM first announced a 1.2 trillion won rights offering, its shares closed at 142,500 won, down 7.77%. The stock then fell more than 19% on an alternative trading platform after the regular market closed. As a result, the planned issue price was reduced from 121,200 won to 89,500 won, cutting the expected proceeds from 1.2 trillion won to 886.1 billion won. Shares closed at 97,500 won on Oct. 28, approximately 37% below their level immediately before the rights offering announcement. On Oct. 23, the company completed payment for the rights offering, allocating 765 billion won of the proceeds to BNSI and the remaining approximately 121.1 billion won to Hungary.

"Although we initially adjusted our investment priorities by postponing investment in the Canadian plant and delaying operations at the Pohang plant, we concluded that internal efforts alone would not be sufficient to secure funding for new investments while maintaining financial stability," an EcoPro official said. "This was because debt had increased following previous large-scale capital expenditures, while weaker performance caused by slowing electric vehicle demand added further pressure."

Samsung SDI and SK On account for approximately 95% of EcoPro BM's revenue, leaving the company heavily dependent on the two customers' electric vehicle battery demand and orders. Samsung SDI is currently expanding its in-house cathode material production, while SK On is diversifying its supplier base. Even if EcoPro BM expands overseas production capacity and raw material investments, it could face delays in recovering its investments if orders from the two customers fail to keep pace.

On a standalone basis, EcoPro BM recorded operating losses of 62.2 billion won in 2023 and 135 billion won in 2024 before returning to profitability last year. In the first half of this year, it posted revenue of 317.5 billion won and operating profit of 7.7 billion won, but recorded a net loss of 400 million won. Its current ratio fell from 109.8% in 2023 to 45.8% last year and remained at just 51% at the end of June this year. Although its core business has begun generating operating profits, its financial resources remain limited for simultaneously supporting the recovery of overseas subsidiaries and financing new investments.

Meanwhile, the overseas subsidiaries that EcoPro BM must support have yet to turn profitable. In the first half, the Hungarian subsidiary posted a net loss of 7 billion won, the Canadian subsidiary lost 1.8 billion won and the U.S. subsidiary recorded a net loss of 270 million won. PT EcoPro ESG Investment, which had supported overseas earnings with a net profit of 40.5 billion won in the first half of last year, also swung to a net loss of 8.5 billion won this year.

With existing overseas production bases still unable to recover their initial investments, BNSI has been added to EcoPro BM's investment commitments, with operations targeted to begin in the second quarter of next year. If the project proceeds as planned, securing nickel directly could help reduce cathode material production costs. However, if existing overseas subsidiaries take longer to become profitable and BNSI also requires an extended period to stabilize operations, EcoPro BM's funding needs could increase further.

For EcoPro's decision to consolidate overseas operations under EcoPro BM to pay off, EcoPro BM will need to generate stable cash flow from its core business while supporting its existing overseas subsidiaries until their profitability returns to normal levels. If operating earnings and cash generation fail to keep pace with investment spending, future overseas investments may also have to rely on borrowing or capital market financing. That would increase the likelihood of repeated appeals to shareholders for fresh capital, as seen in the recent rights offering.

"Bringing upstream smelting operations under a cathode material producer could strengthen the competitiveness of the final product, cathode materials," an EcoPro official said.

Kim So-ra

#EcoPro #Battery #EcoPro BM