Turning Specialty TiO₂ Into the Engine of Cosmo’s Circular Battery Future

I would like to begin with the broader market environment for South Korean small and medium sized enterprises. In recent years, global markets have become more constrained and competition has intensified. Many Korean SMEs are trying to diversify overseas to find new opportunities, and at the same time we are seeing shifts in global trade and supply chain policy that are changing the rules of international commerce. Do you agree with that perspective, and where do you see opportunities for Korean SMEs on the global stage?

Yes, I agree. The domestic market in Korea has become increasingly saturated, and on top of that we are seeing low priced, highly competitive products coming in from China. Under those conditions it is very difficult to sell higher priced, higher value products domestically. So for many Korean SMEs, expanding overseas is no longer optional, it becomes a necessity.

From our perspective, that necessity can also be an opportunity. As strategic competition between the United States and China has intensified, many companies still use Chinese products, but at the same time they are actively trying to adopt alternatives outside of China. This trend of de risking and diversification, what people often describe as de sinicization or reducing dependency on China, can be a meaningful opportunity for Korean SMEs like ours.

Another important change is how companies now think about supply chains. In the past, many firms wanted to concentrate procurement in one or two large suppliers or in one or two countries because it reduced cost and seemed more stable. But now the perceived risk is much higher, so supply chains are being reshaped. Companies are deliberately diversifying their supplier base, looking beyond China, adding Europe, adding Southeast Asia, and redesigning sourcing strategies to manage geopolitical and operational risk.

In that environment, I believe global companies can view Korean SMEs as reliable partner suppliers. Korea is geographically well positioned, and there is also an underlying baseline of technological capability and manufacturing quality. People recognize that Korea has global leaders like Samsung and LG, and that reputation supports the credibility of Korean industry more broadly. Korean SMEs can be seen as trustworthy in both technology and quality, and Korea is relatively stable geopolitically. That combination makes this period, in my view, a genuine window of opportunity for Korean SMEs to be integrated into global supply chains in a more strategic way.

The titanium dioxide market is highly concentrated. Around 60 percent of the global market is controlled by five major companies, including Chemours, Tronox, LB Group, Kronos, Venator. This structure creates significant pressure for smaller companies, because the remaining share of the market is limited and competition is intense. Mid-sized firms often pursue two strategies. One is to diversify into niche specialty products and broaden their portfolio, including moves into battery related materials. The second is to diversify geographically to reduce dependence on a single region. In such a competitive landscape, how can a company like yours compete and differentiate against large scale global players?

In our case, titanium dioxide has historically been primarily an export business. We do sell domestically, but a very significant portion has been exported, so we have always operated with an international market mindset.

To your point about the market structure, the major global producers tend to dominate the high quality, higher price segments, while many Chinese producers dominate the low cost segments. In the past, we were able to operate in the middle. You could say we were able to cherry pick an attractive mid range segment between premium global suppliers and very low cost producers. But that space has become increasingly limited, and we recognized there are clear boundaries to how far that strategy can take us.

So the market we are focused on now is the high value added market, what we call the niche market, and specifically what I would describe as the specialty grade segment. Our main strategic focus is the specialty grade niche market.

This specialty grade segment has some very distinct characteristics. In volume terms, it is less than 2 percent of total global titanium dioxide output. So it is a small portion of the market by tonnage. However, its growth rate is significantly higher. Overall titanium dioxide growth globally might be around 1.4 percent, but specialty grade can grow at around 4 to 5 percent. That difference matters because it means the value pool and growth dynamics are meaningfully better.

There is another structural factor as well. Titanium dioxide is an industry with high upfront investment and potential environmental impacts, so it is not easy for new entrants to come in. In reality, there are very few, if any, new competitors starting from scratch. The market tends to remain centered on existing producers because the barriers to entry are high. The overall market scale is also large, roughly around 20 trillion won, and those economics and regulatory realities discourage new entrants.

Another point is process and product mix. Much of the specialty grade market is closely tied to the anatase segment. In other regions, rutile or chloride process products can be more common, but in certain specialty applications anatase demand is very significant. Because we produce anatase, this gives us an advantage in targeting certain specialty applications.

So our strategy is to focus where we can win. We are concentrating on pharmaceuticals, textiles, electronic materials, and catalyst applications. Those areas require high purity, consistent quality, and in many cases customization.

In pharmaceuticals in particular, it is a market where specifications do not change frequently, and once an approved material is adopted, it tends to stay. Because we produce anatase, we are working in an OEM model with Kronos. In that model, we manufacture to Kronos specifications, and Kronos sells under their network and relationships. It is a way to enter and expand in markets that demand high purity and strong credibility.

Factories

Could you explain more about the OEM collaboration with Kronos. Is it primarily intended as a path into the United States market, or is it more about strengthening your network after entering, and positioning for higher end segments?

The main purpose is to enter the high-end segment, and within that segment, especially applications that require very high purity, such as pharmaceuticals. We see this collaboration as a bridgehead, a strategic foothold to enter those demanding markets with credibility. It is not only about the United States as a geography, but about entering a category where the standards are strict and relationships and trust matter.

At the same time, we are also working to expand into electronic materials. In Korea as well, there is substantial demand. For example, in MLCC applications, the dielectric can have titanium dioxide as a key component. But in those electronic material and catalyst applications, especially in the ultrafine category, customers do not simply buy a standard commodity. They require rapid response, tailoring to their requirements, and consistent performance. They want a customized product, not something you deliver once and assume it will work universally.

Because of that, the ultrafine segment is used mainly for electronic materials and catalysts, and to secure long term customers you need strong application development and technical service capabilities. These products are not designed for many general uses. They are often effectively made for a specific customer and a specific process.

We believe we have advantages there. We are located close to key customers, such as Samsung Electro Mechanics and also certain Chinese manufacturers. We also have fifty years of experience in this business, and one of our strengths is that we can adjust and optimize processes effectively. That gives us a practical ability to respond to customer requests and produce the characteristics they need. We want to leverage that strength to compete in the ultrafine segment.

Titanium Dioxide

In the specialty grade, high value titanium dioxide market, are you trying to collaborate more with global competitors, or are you developing a strategy focused on securing a small number of major customers and partners?

In high value titanium dioxide, we focus on targeting one or two key customers. The reason is that in many cases titanium dioxide is a core material for their products, and once you are selected and qualified, they do not change suppliers easily. That stability is valuable.

But there is also a confidentiality dimension. Customers want their formulations, processes, and sourcing strategies protected. If a supplier sells broadly to many parties in the same segment, some customers may hesitate to adopt the product in the first place. So we have to maintain trust and confidentiality. That is why we are selective and strategic about partners in that space.

You mentioned your ability to customize products. I have lived in Korea for several years, and one thing many Korean companies do well is adapt to the market. Today that adaptability is increasingly supported by automation and new digital technologies. From your company’s perspective, how important is digital transformation and smart factory modernization in maintaining competitiveness and supplying customized products?

For a mass production plant like ours, customers strongly prefer to minimize manual human handling. The reason is straightforward. When more human handling is involved, quality can vary more easily. Customers are very sensitive to that, so they value automation.

Up to now, we have continuously changed our processes to reduce reliance on manual operations and increase automation. That has helped us earn customer trust. In our kind of operation, customers genuinely like automation because it supports stable, repeatable quality.

At the same time, smelting and refining is, in many ways, still an analog business. It is not a business where you can always solve everything through formulas and immediately obtain the answer. Many outcomes must be learned through process experience. You have to experiment, solve problems through trial and error, and accumulate know how. In that sense, it has a strong analog character.

However, what has changed is the environment around data. In the past, even if you collected data, it was difficult to interpret and apply. But computing power has advanced rapidly, and AI technologies have developed significantly. So now our focus is on collecting clean, reliable process data, data that is not contaminated or distorted. If we can collect high quality data from the process, then later we can integrate AI and advanced analytics, and we believe that could lead to major improvements in technology and process performance. That is why building the system and data foundation is important.

Kiln

When do you think your system build out will be completed? Do you have a timeline for establishing that digital and data infrastructure?

It is difficult to give an exact timeline today. But we have already started. In a task force format, we have begun collecting process data. After that, we need to identify and work with new partners who can help us apply AI technologies effectively. So the key point is that the data collection has started, and the next step is to build the right external partnerships to connect that data to practical AI applications.

Today Cosmo Chemical is not only producing titanium dioxide, but also producing cobalt in Korea and operating across multiple industrial areas. I understand that in cobalt, around 60 percent comes from recycling and 40 percent from mined sources. When you look at the present and the future, how do you think about titanium dioxide relative to your battery related businesses?

Looking at both the present and the future, in the present we are focusing on titanium dioxide. At the same time, on the recycling and battery materials side, including lithium, cobalt, and nickel, we are developing technologies and securing customers as preparation for the future.

I see titanium dioxide business as the core of the company. We will continue to expand the high-end segment OEM model with Kronos, and that will be an important growth path. At the same time, we are developing the foundation to grow the battery materials side over time.

I would like to ask about titanium dioxide technology development. To produce higher value titanium dioxide, certain processes such as sulfate processing and calcination are used, but these can be slower and can create sustainability and energy burdens. In environmental terms, how can those burdens be addressed in the production of high value titanium dioxide?

From an environmental perspective, we need to develop and apply waste treatment technologies in parallel. For example, one key byproduct is ferrous sulfate, and we have research and intellectual property related to using it for LFP applications. The way we treat byproducts and waste can create additional value if we develop the right methods.

As I mentioned earlier, chloride process products require significant heat treatment and do not always deliver certain characteristics, including the smaller particle sizes that are required for some high value applications. In addition, in Korea, the chloride process is not practically feasible under current conditions. There are regulatory and safety realities because chlorine gas is hazardous. So in Korea, we cannot simply adopt that approach. If we were to pursue chloride based production, it would likely require going overseas, and even then there are serious safety and regulatory hurdles.

So for now, we focus on building the business around our strengths with the sulfate route and improving our outcomes through process control, environmental treatment, and advanced applications.

Another factor that seems to strengthen your competitiveness is your group structure. I apologize, I forgot the name for a moment, but I understand there is Cosmo Catalyst. You sell titanium dioxide, and they make catalysts. You also operate OEM business models as part of your value chain. What is the difference between these two approaches, and why does operating both make you more competitive?

The key advantages are cost competitiveness and supply chain stability. Especially in battery related businesses, once you are locked in as a supplier, it is not easy to change, so stability becomes a strategic advantage.

In our group structure, it works like this. We produce the base material. Cosmo Advanced Materials & Technology produces cathode materials. Cosmo Catalyst produces additives that go into those cathode materials. And then when Cosmo Advanced Materials & Technology has off grade materials, residues, or recycled scraps, we process those again and recover materials to make new feedstock.

From our perspective, this creates synergy because the supply chain becomes smoother and more reliable. We can support customers with more stable delivery, and we can also provide the type of input they need, whether they want mined material or recycled material. That integrated structure enhances both cost and stability.

If we look at the synergy with Cosmo Advanced Materials & Technology, how would you position Cosmo within the broader technology and battery industry? Do you see Cosmo Advanced Materials & Technology as a major driver of growth because it helps reduce cost and strengthen competitiveness?

Cosmo Advanced Materials & Technology has a more direct relationship with Battery manufacturers, it will play a leading role in driving growth across the group. As one of the key pillars of the Group’s value chain, we contribute by maintaining and strengthening these relationships, which in turn helps activate the entire chain and generate greater scale and efficiency across the group.

How have customers responded to Cosmo’s vertical integration model, from raw materials through precursors?

Cosmo Advanced Materials & Technology’s precursor business is expected to begin full-scale operations in the near future. Many companies in the market are closely watching our vertically integrated structure with strong interest.

We can supply raw material directly from our plant. In many cases, companies must purchase solid raw materials and then dissolve or process them. But we can supply dissolved material in line, directly. From a cost competitiveness standpoint and a supply chain standpoint, and also from the stability perspective we discussed earlier, I believe customers will view that positively. At the moment, it is more of a logical expectation based on the structure, because the business results are still in progress.

Recycled black powder

One major factor in battery recycling is secure access to black mass. If the expected growth in recycled battery supply is delayed compared to two or three years ago, how important is it, in today’s market, to build a stable supply chain for black mass and the overall recycling ecosystem?

It is very important. Securing a stable black mass supply is critical, and in the long term it is one of the core success factors.

To address this, we are pursuing multiple approaches. We are cooperating with partners such as CNGR. We are also pursuing a strategy where we can use two types of feedstock, both mined sources and battery derived sources, to increase flexibility.

In addition, we are considering tolling business models. That means processing on behalf of customers. For example, when companies use batteries in production, there can be a significant volume of defective or off grade material. We can take that black mass, process it, and then deliver the processed output to a designated party selected by the customer. In that structure, we do not carry the same level of stress around sourcing raw materials ourselves, because we are paid for processing. Over the long term, I believe stable supply chains and secure black mass access are central to success.

Tolling business, could you explain that more specifically? How does it work in practice?

For example, a battery companies can generate a large volume of defective batteries. From those defective batteries, black mass is produced. We can receive that black mass, process it, and then deliver it to a company designated by battery companies

In this model, we match the required processing volumes, and instead of taking on the burden of securing our own raw material supply, we primarily earn processing fees. In other words, we are selling the processing service.

Is that something you do only in Korea, or also overseas?

We are also working in Europe. Europe is expected to be a primary area for this. China is less central for us in this specific model, although we do have certain operations there. In Europe, partners like CNGR also want these structures, so we can process battery derived materials from Europe and then return outputs into their customer network.

In the United States, regulations are not yet fully determined, so the situation remains uncertain. But Europe is clearer, and CNGR is also positive about the European region. As I mentioned, we can take feedstock from Europe, process it, and send it back into the customer’s supply chain.

Cobalt, Lithium, Nickel

I have heard that by 2050, batteries used in Europe may need to be recycled entirely within Europe. If that becomes the rule, would you consider moving facilities or building local capacity there?

If that becomes a firm requirement, then yes, we would have to consider options such as relocating part of the manufacturing footprint or building facilities locally. That kind of requirement would naturally influence where capacity must sit.

In terms of overseas expansion, what is your short term strategy? Are you planning to expand networks within Europe, given that different European countries may take different approaches and require different local networks?

At the moment, rather than focusing on overseas expansion, we are focusing more on technology development. If you expand overseas, you must redesign and invest, and once you invest, you cannot easily reinvest or reverse that decision. So we are being careful and strategic.

The reason technology development is the priority is that without cost competitiveness you cannot win. You need both cost competitiveness and quality competitiveness. Cost competitiveness in recycling ultimately depends on whether you can extract the maximum amount of desired metals from low cost feedstock, even from materials others do not want to use. And you also cannot compromise on impurity management. In secondary batteries, impurities are one of the most critical issues. So we are concentrating on two areas. One is improving extraction from challenging feedstock. The other is expanding our ability to remove impurities at the highest level.

Our recycling plant was completed around mid 2023, so we still have work to do in terms of tuning, improvement, and advanced development. Over the next one to two years, as larger scale use of lithium and cobalt expands, we expect there will be a period when more full scale investment becomes justified. For now, we are focusing on building the technology base, improving impurity control, and strengthening the ability to recover target materials even from difficult inputs.

I noticed there appears to be work related to LFP. I was not fully certain, but my understanding is that you may have patented technology connected to LFP battery materials. Could you explain that in more detail? Are you providing products that use byproducts as inputs for LFP materials?

In LFP, we generate a significant amount of ferrous sulfate as a byproduct, and we tested whether we could combine that with certain inputs and produce LFP. Technically, it was possible.

However, at this stage we do not yet have cost competitiveness with the current method. So we are working further to achieve cost competitiveness. If we can secure that, then we could potentially enter the LFP market. And as I mentioned, it would also help us address and utilize byproducts generated from the sulfate process. So we will continue research in that direction.

In 2024, I understand the group’s consolidated revenue is around 750 billion won, and that it has recorded approximately 13 percent CAGR. Over the next three to five years, how do you expect this number to grow, and what do you see as the most important drivers of that growth?

Last year, for Cosmo Chemical alone, it was slightly under 200 billion won. Including the combined businesses, it would have been around 170 billion won at Cosmo Chemical. This year, we expect around 200 billion won, and next year we expect around 260 billion won. That is the growth plan we are working toward.

We expect around 20 percent growth. Starting next year, productivity will improve. The pharmaceutical business we are doing with Kronos is expected to increase to more than 40 percent of our volume. We also expect some approvals to begin coming through for new ultrafine products, and once approvals begin, sales can start.

As we shift further into high value added products, we believe profitability can emerge next year. On the secondary battery side, raw material supply is challenging right now, so we are concentrating on improving technologies that allow us to extract metals from feedstock that others do not use, and we are focusing on impurity removal technology development. Until those technologies are fully developed, our near term strategy is also shaped by cobalt pricing. Cobalt prices have risen significantly. So we focus on how to secure low cost cobalt, increase plant utilization rates, and sell more volume. In the battery business, we must survive in the near term. That is a practical reality.

But in the long term, we see a significant opportunity in the secondary battery sector. That is why we are investing heavily in the technology development side, because that is what will allow sustainable competitiveness.

You currently sell to more than 20 countries. What is your international strategy across these markets? You mentioned the United States earlier as well. How are you thinking about overseas strategy?

If Kronos requires it, we may also consider hiring related personnel directly overseas, but at this stage it is not sufficiently concrete for me to describe in detail. More broadly, I believe cooperation with our partners will be important. So while there are possibilities such as overseas hiring, we are still in a stage where the specific plan is not finalized.

Many overseas investors coming into Korea are investing with a focus on advanced technology. Given the current slowdown in the electric vehicle market, and the fact that your group has invested early in recycling, creating financial burden and risk, how do you persuade overseas investors and build confidence?

Today we are in a phase of building what I would call an ideal portfolio. There are near term pressures, including the EV market slowdown and the financial burden that comes from early investment in recycling facilities. And while it is true that we are not yet delivering the profitability we ultimately want, the key question right now is stability. How consistently can we operate the existing businesses, and how much cash can we generate from stable operations, while at the same time building the growth engines for the future.

In that context, titanium dioxide is very important. If titanium dioxide moves into the high value added segment and generates stable profits, and at the same time, in the secondary battery business we secure technology capability and achieve multiple customer approvals, and we demonstrate real price competitiveness, then we can grow these two pillars together. When investors see a portfolio that produces stable earnings today and has credible growth tomorrow, they will naturally gain confidence.

So I believe what matters now is to build trust, both technologically and commercially, and to continue strengthening the company so that we can demonstrate that stability and growth trajectory.

Today you are celebrating the company’s 57th anniversary. If we meet again in three years and do this interview again, what would you most like to have achieved by then? What is your dream and your goal?

The goal is the completion of the portfolio I described. By that point, we want to achieve double digit operating profit, and we also want to achieve a meaningful level of profitability in the secondary battery business as well. If we can do that, then we can truly position ourselves to grow as a long term company, a company that can become a hundred year enterprise. By that time, the portfolio will be much more complete, and we will be on a stronger foundation for the future.

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