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S. Korea aims to become dominant producer of rechargeable batteries by 2020

SEOUL, July 11 (Yonhap) -- South Korea plans to inject up to 15 trillion won (US$12.5 billion) to become the world's dominant producer of rechargeable batteries in the next 10 years, the government said Sunday.

   The Ministry of Knowledge Economy and the Ministry of Educational Science and Technology said the new "Battery 2020 Project" aims to pool resources from both the state and private sector to gain control of the rapidly expanding industrial sector.

   The global market for rechargeable lithium-ion batteries is expected to grow six-fold from US$12.3 billion this year to $77.9 billion in the target year as demand for the convenient, eco-friendly power source rises in such areas as mobile information technology products, electricity powered vehicles and power cells used to store energy.

   As of 2009, South Korean, Japanese and Chinese companies controlled 95 percent of the global production with Japan's Sanyo holding onto 20 percent of the market followed by Samsung SDI Co. and LG Chem Ltd. controlling 19 percent of worldwide production each.

   This was followed by a 12 percent market share for Sony and 7 percent for China's BYD.

   "South Korea's Samsung SDI and LG Chem already control 38 percent of the market, but actual percentage of local parts and technology used to make these products stand at less than 20 percent," a knowledge economy minister said.

   He said local companies import a large number of parts and materials to make batteries from countries like Japan and make use of foreign technologies, which effectively limit competitiveness and hinder future growth.

   "If Japan's technology level is rated as being 100, South Korea stands at 50 in terms of components and materials, and at just 30 in the area of original technologies," the official said.

   Government ministries said that if the research and development (R&D) project meets expectations, the country's technology capabilities should reach 80 percent levels of current industry leaders, with the combined global market share of South Korean battery manufacturers hitting 50 percent.

   They predicted that by 2020, 75 percent of all components and materials used in batteries made in the country should come from indigenous suppliers.

   This, in addition, is expected to help create up to 10 globally competitive local battery manufacturers in the next decade. The R&D effort could help train 1,000 qualified technicians and engineers who can further advance the country's competitiveness in this key field.