SEBANG Global Battery’s New Leap Forward

In the current global environment, marked by heightened tariff policies, geopolitical tensions, and growing uncertainties, many experts argue that adaptability and agility are critical for suppliers to survive. Given that nimbleness and flexibility are often considered hallmarks of South Korean mid-sized companies, what challenges and opportunities does this environment present for them?

The ongoing realignment of global supply chains presents complex challenges for manufacturing companies. These include rising tariff burdens, instability in raw material supply, and an accelerated shift among global customers toward localized production and procurement. Companies like ours, which rely solely on manufacturing operations in Korea, face increasing disadvantages in terms of lead times and costs. As a result, the ability to maintain a flexible supply chain and respond to regional market conditions has become more critical than ever.

Despite this uncertain global environment, lead-acid batteries continue to serve as essential consumer products with strong, real-world demand across a wide range of industries. We expect this demand to remain robust and continue growing in the mid- to long-term. Sebang Global Battery is responding proactively by leveraging our globally diversified network to adapt to regional supply chain shifts.

In North America, we have secured logistical flexibility by operating our own corporate warehouse. In Europe, we are reinforcing our presence in Germany to enhance customer engagement. In Japan, we have reorganized our distribution network around our Tokyo office and accelerated the discovery of new buyers, resulting in a meaningful recovery in sales. At the same time, we are expanding the share of overseas sales for our high-margin products such as AGM batteries and are collaborating with global automotive OEMs to develop high value-added technologies.

Backed by the trust of our global customer base, Sebang Global Battery will continue, as we have in the past, to transform today’s challenges into opportunities through strategic agility and effective execution.

You outlined different regional strategies in response to shifting market dynamics. Europe’s automotive sector showed signs of sluggishness in 2024, with only a 0.8% increase in new car registrations, and this year appears to be continuing that trend. In contrast, the U.S. initially projected strong growth for the automotive industry in 2025. Given your global presence in over 140 countries, how do you foresee the evolution of the industry and its impact on your company?

As of 2024, the number of registered vehicles globally is estimated at approximately 1.72 billion, with around 1.67 billion internal combustion engine (ICE) vehicles and roughly 50 million electric vehicles (EVs). This figure is projected to grow at an annual average rate of over 2.7%, surpassing 2 billion by 2030. As a result, demand for automotive batteries is expected to continue rising, driven by the need to replace batteries in ICE and hybrid vehicles that still use lead-acid batteries.

Moreover, many EVs also require lead-acid batteries for auxiliary power, meaning demand is growing not only for conventional vehicles but also for electric ones.

We also expect increased demand for industrial lead-acid batteries. In response, we are expanding our presence in overseas markets and targeting niche segments. Our product portfolio is being enhanced around high-margin AGM batteries, which are used across various vehicle types including EVs, hybrids, and ICE vehicles. We are also strengthening our logistics and sales bases in North America to align with regional growth and are accelerating strategic partnerships with global OEMs.

While lead-acid batteries are often viewed as commodity products, with price being the main competitive factor rather than technology, why do you believe AGM batteries will drive Sebang's future growth, and what types of innovations or expansions are you pursuing in this area?

We firmly believe that the demand for electric vehicles will continue to grow. Although the market is currently experiencing a temporary slowdown, or "chasm," we anticipate that the long-term trend will remain upward. In preparation for this, we have already developed and are selling AGM batteries designed for auxiliary use in EVs, and we are currently working on the development of additional AGM models specifically for EV applications.

Our R&D team is also focused on improving the charge acceptance rate of AGM batteries to extend their lifespan. Looking ahead, we expect AGM battery sales to significantly outpace those of traditional flooded lead-acid batteries. Accordingly, we are planning to continue expanding our production capacity. Sebang Global Battery is committed to ongoing research and development to ensure AGM batteries become the core of our future product lineup.

Sebang Global Battery’s revenue has grown at a compound annual growth rate of 12.5% over the past five years, surpassing KRW 2 trillion in 2023. Operating profit reached KRW 169 billion, a 44% year-on-year increase. These are impressive figures in a market characterized by raw material volatility and growing competition from lithium-ion batteries. What are the key factors behind this strong performance?

One of the main drivers of our profitability has been the increased sales of AGM batteries, which are high-margin products. Additionally, we diversified our customer base by securing new buyers in Europe and North America, regions where profit margins are generally higher.

We also opened our Tokyo office in 2023, which has helped revitalize our presence in the Japanese market. Another key initiative was our acquisition of local secondary smelter which enabled us to achieve greater stability in raw material procurement and enhance cost competitiveness through vertical integration.

To elaborate further, lead, the most critical raw material in battery production, is sourced through one of our affiliates. Separators, another essential component, are procured from Sebang Industry, also part of our corporate group. Logistics, including sea, air, and domestic transportation, are managed through affiliated companies, and we implemented our ERP system through our affiliate E&S Global. This comprehensive vertical and horizontal integration has allowed us to embed efficiency, cost control, and supply chain stability throughout our entire value chain.

Korean companies have been pioneers in adopting AI and advanced digital technologies. How has Sebang Global Battery approached digital transformation?

At Sebang Global Battery, we are currently building an AI-powered system aimed at preventing safety and environmental incidents before they occur. We have also implemented AI vision inspection systems to automate quality control on our production lines. In addition, our predictive maintenance systems have significantly reduced defect rates while maximizing equipment uptime.

We are collaborating with the science and technology university in Gwangju to jointly develop AI-based technologies for battery life prediction, defect detection, and process optimization.

Furthermore, we have signed an MOU with the national energy research institute to implement an energy analysis system across our manufacturing processes. This initiative aims to improve energy efficiency by 2%, and pilot testing and technology validation are currently underway at our Gwangju plant.

The lead-acid battery market typically consists of both OEM and aftermarket segments. As Sebang positions AGM as a key future product, what kinds of partnerships are you seeking in both areas to drive growth?

We are currently in discussions with several of the top 10 global companies regarding AGM batteries. Our goal is to expand our presence in both the OEM and OES sectors. We are actively engaging with top-tier car makers and auto parts suppliers, among others, to build strategic partnerships that support future growth.

What would you like readers to take away from your contribution?

Innovation. At Sebang Global Battery, we are continuously developing new battery technologies and working to extend battery lifespan. Achieving these goals requires more than traditional thinking, it demands a spirit of innovation. We believe that only by embracing change and forward-thinking approaches can we lead the next phase of battery technology.

For more information, please visit: www.gbattery.com/