Vitzro Cell, the largest lithium primary battery maker in South Korea, has signed a 30 billion won ($25.2 million) battery pack supply deal in a move highlighting its shift towards the new area of business, according to industry sources on May 28.
“With another contract on the way, it looks like Vitzro Cell is shifting its priority to battery packs,” said one industry watcher.
The battery packs will be produced from its newly-built “smart campus” plants in Dangjin City of South Chungcheong Province.
Vitzro Cell estimates the battery pack line to initially generate up to 6 billion won of sales a year to ultimately reach 20 billion won. Its sales target for this year is set at 136 billion won with an operating profit of 17%.
With a margin rate of 100%, battery packs are essentially more lucrative than primary batteries which are discarded after a single use; lithium-ion batteries are recyclable.
Primary batteries are, however, have longer duration and longer lifespans. Some are designed to instantaneously exert high power to be used in weapons or smart meters.
Vitzro Cell has been preparing to make the shift for quite a while now, according to market watchers. The decision was made easier due to its experience in battery pack ODM, which involves securing materials, the equipment and the assembly.
Just two years ago, Vitzro Cell incurred billions of won of damage from a fire that burned down its production facilities. A year later, it successfully built the smart campus, which was three times bigger than its existing facilities. Smart campus includes atomization equipment and the world’s largest credibility tester.