Samsung seeks supremacy in new businesses

Lee Ji-yoon in Seoul/The Korea Herald

Seoul (The Korea Herald/ANN) - One of the hottest topics in the global auto industry this year is BMW's first electric car, the i3 hatchback that goes on sale in the second half of the year.

For the ambitious i project, the German premium carmaker has picked Samsung SDI as the sole provider of lithium-ion batteries - the crucial part of electric vehicles.

In 2010, Samsung pinpointed the electric car battery sector, together with the medical, biologics, solar energy and OLED display panel businesses, as areas to push for future growth engines by 2020.

Samsung SDI, equipped with its global supremacy in the rechargeable battery market for smartphones and other mobile devices, has been recently ramping up efforts to expand its presence in the emerging EV market.

After acquiring shares owned by Bosch of SB LiMotive, a joint venture of the two companies that make batteries for vehicles, the Samsung affiliate in January set up an exclusive business division in charge of the development and sales of electric car batteries.

Following its battery deals with BMW, Chrysler and Mahindra & Mahindra, Samsung SDI in May secured another deal with Volkswagen, the largest carmaker in Europe, after years of fierce competition with global rivals such as LG Chem and Panasonic.

As its partners are expected to start producing electric models this year, the company plans to increase battery production drastically at its Ulsan plant from a monthly 50,000 units last year to 400,000 within the first half of this year.

Adding to the Korean production, the company is considering extending the output to a monthly 2.8 million through its global production bases in Europe, China and the United States.

In order to improve the range of electric vehicles, the company is also working on a large-capacity battery pack that could increase the driving range up to 300 kilometers on a full charge.

Considering its key partners, BMW and Volkswagen, are German brands, another positive sign is that the German government is pushing hard for the fast penetration of electric vehicles with an aim to have 1 million cars by 2020.

In the meantime, Samsung SDS, the nation's top information technology service provider, is also a Samsung affiliate that is craving bigger success as a global player.

The company aims to see about 40 percent of its profits from overseas markets this year, setting a goal of achieving 22 percent growth in total sales from last year's 6.1 trillion won ($5.5 billion) to 7.5 trillion won.

The company says it will pour more resources into the digital space convergence business that applies IT and design technology to buildings such as libraries, museums and shopping malls. The market is expected to reach 30 trillion won by 2015.

Samsung SDS, based on its success in its home turf, plans to expand its businesses into abroad, especially the Middle East, Europe and the United States.

In May last year, the firm was chosen by Saudi Arabian Oil, a state-run petroleum firm more widely known as Saudi Aramco, as the provider of digital convergence know-how for a project to build a cultural center in the Saudi city of Dhahran.

The company also secured a project to build a new library building for the U.K.'s University of Birmingham last year.

The company has built up infrastructure for electric procurement systems in countries such as Vietnam and Mongolia, while its automatic fair collection technology has already been supplied to subway stations in China, India and Malaysia in recent years.

Samsung SDS' relentless expansion is expected to continue in the coming years. It plans to expand investment to nurture next-growth engine businesses such as mobile cloud services and big-data solutions.