The world’s leading producer of copper foil for electric vehicle (EV) battery cells will build its first overseas plant in Kota Kinabalu, with an investment of up to RM2.3 billion by 2023.

SK Nexilis, part of South Korean giant conglomerate SK Group, a Fortune 500 company, said the plant at the Kota Kinabalu Industrial Park (KKIP) will be capable of producing 50,000 tonnes of copper foil once it begins operations in 2023.

In a joint statement with the Malaysian Investment Development Authority (Mida), the company said KKIP was chosen due to its stable and competitively priced electricity supply.

“Malaysia provides the most stable and competitively priced electricity supply among its Southeast Asian counterpart.

“The selected site also has excellent infrastructure such as gas and water and high accessibility to ports and large international airports which are required for exports,” the statement said.

International Trade and Industry Minister Mohamed Azmin Ali welcomed the announcement as another achievement by Mida despite the economic gloom brought on by the Covid-19 pandemic.

“Indeed, this investment will also boost Malaysia’s talent network and capabilities through initiatives with domestic universities and technical institutes.

“Despite the ongoing pandemic, Mida continues to draw high technology investments such as these into the country to provide tangible opportunities for innovation and local supply chain development,” he said.

SK Nexilis is a global leader in thin-tech innovation for copper foil manufacturing, which is crucial for batteries used in electric vehicles.

Data from SNE Research indicates that the EV market will increase by 41% annually, with demand for batteries going up by 38% by 2025.

“We will be able to respond more quickly to customer requests by establishing a production facility in Malaysia with the best technology to produce the world’s thinnest copper foil for secondary batteries,” said a spokesman for SK Nexilis.

The announcement marks the second major investment this month by a global conglomerate after German carmaker Volkswagen Group announced a massive parts hub in Johor.

Meanwhile, SK Nexilis CEO Kim Young-tae said the Malaysian plant will boast facilities with cutting-edge technology that could produce “the thinnest and widest battery copper foil”.

“By building the plant in Malaysia, we will improve cost competitiveness and enhance our commitment to RE100, so we can consolidate our status as the world’s No. 1 supplier of battery copper foil,” Kim was quoted as saying by South Korean media today.

The thinner the copper foil is, the more it can accommodate active material in a limited space.

Demand for ultra-thin copper foil has been on the rise as EV makers look to increase battery energy.