Korean battery recycling company SungEel HiTech is facing increased uncertainty in its performance due to the ongoing operational halt at its Hungarian plant amidst falling prices of metals like lithium and nickel, and an overall industry downturn. SungEel HiTech’s Hungarian plant has been subject to local government sanctions following a series of accidents and environmental pollution issues.
According to industry sources, SungEel HiTech’s revenue for the first quarter of this year is expected to drop significantly to approximately $36.2 million from $64 million in the first quarter of last year. Last year’s first-quarter operating profit and net profit were $9.2 million and $6.5 million, respectively, but this year, the company is anticipated to incur an operating loss of $11.9 million and a net loss of $5.1 million.
Last year, SungEel HiTech received an order from the Hungarian provincial government to halt plant operations due to excessive waste storage and accidents causing injuries. SungEel HiTech operates two plants in Hungary, and Plant 2 remains shut down. By the end of last year, the revenue from the Hungarian subsidiary accounted for about 12.6% of the company’s total revenue ($194.5 million). The company also has overseas plants in China, Poland, India, and Malaysia.
Last year, the Hungarian subsidiary posted an operating loss of approximately $10.2 million, turning to a deficit from an operating profit of $6 million the previous year. During the same period, the net profit shifted to a loss of $9.7 million from a profit of $4 million, with revenue declining from $50.7 million to $24 million.
Recently, SungEel HiTech’s Hungarian subsidiary has been preparing plans to address recommendations from the provincial authorities and is negotiating the timing for resuming plant operations. They have launched an official website in Hungarian and are running factory tour programs to communicate with the local community and residents.
Similar issues are delaying the construction of a battery recycling plant in Germany. Concerns over environmental and safety issues surrounding battery recycling have intensified opposition from the local community. Initially scheduled to break ground in the first quarter of this year, the project has been delayed due to pending government approval and a public hearing rescheduled to the end of this month.
Meanwhile, SungEel HiTech's third plant (Hydro Center) in Gunsan, Jeollabuk-do, is set to begin operations next month. The third plant's production capacity includes 15,000 tons of nickel, 1,200 tons of cobalt, and 9,500 tons of lithium. The company plans to start trial production in the second quarter and aim for early mass production. The operational status of the third plant is expected to impact the pace of future performance recovery.
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