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South Korean energy company SK Innovation is set to sell its unprofitable lithium battery separator assets in China to Yunnan Energy New Material, also known as Semcorp, for approximately CNY400 million (about USD59 million).
Semcorp will acquire full ownership of SK Hi-Tech Materials from SK Innovation’s electric vehicle battery subsidiary. The final sale price will be adjusted based on the company’s financial statements at the deal’s closing.
The acquired company operates SKIET’s lithium battery separator plant located in Changzhou, Jiangsu Province. It has an annual production capacity of around 940 million square meters, with eight base film production lines and 10 coating lines for active material application. Major customers include SK Innovation and its affiliates.
The acquisition aims to quickly ramp up production capacity, shorten the timeline for expanding facilities, cut costs associated with capacity projects, secure more separator orders, and meet increasing demands from downstream clients.
Over the past two years, SK Hi-Tech Materials has been operating at a loss. It reported net losses of CNY388 million in 2024 and CNY438 million in 2025, with revenues of CNY477 million and CNY454 million during those years. As of the end of last year, its net assets stood at CNY1.9 billion (roughly USD280 million).
While the asset features modern manufacturing equipment, limited market expansion and overly concentrated customer bases have kept its operating rates low. This has increased production costs per unit and contributed to ongoing losses, according to Semcorp.
Once the transaction is finalized, Semcorp intends to leverage its customer network, economies of scale, cost management expertise, and core R&D capabilities to address the underlying issues that have led to SK Hi-Tech Materials’ sustained losses. The goal is to revitalize the business and unlock its full production potential.
Driven by strong demand, Semcorp announced in May that it planned to invest CNY4 billion in a joint venture separator factory in Zigong, Sichuan Province, with an annual capacity of five billion square meters. However, the company also revealed plans to cancel a CNY2 billion separator plant project in Malaysia, citing changes in policy, market conditions, and business strategy.
Semcorp’s stock closed slightly lower at CNY71.81 (about USD10.58) after earlier rising by up to 3.3%. The Shenzhen Composite Index increased by 0.8%.
This divestment is part of the ongoing restructuring of SKIET’s lithium battery and raw material divisions. The company also plans to shut down its South Korean plant by year-end and consolidate all lithium battery separator production in Poland, according to reports from The Asia Business Daily.
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