Umicore halts construction on Canadian battery materials plant
Umicore is focusing on fully utilising its existing battery material plants before expanding further. As part of this strategy, it has decided to continue pausing construction of a new plant in Ontario, Canada, but will maintain a core team at its local office there.
The decision to pause the construction of the Canadian plant was made in alignment with the company's customers. The long-term supply agreement with AESC for high-nickel cathode active materials for the North American market will be served from the company's plant in Cheonan, Korea. Umicore says it has not drawn on the incentives from the Governments of Canada and Ontario for the Loyalist plant. In the event of restarting construction, the company will however continue to have access to those incentives – under the same conditions, including employment commitments.
Umicore has also shared details on additional cost-saving measures. These measures may impact approximately 260 positions in select parts of the organisation. In Battery Materials, Umicore intends to resize the workforce predominantly in its production plant in Jiangmen, China. The company also intends to resize its Group Corporate Functions in line with current needs. Adding to this, Umicore will also adjust the setup of its R&D activities for greater efficiency and customer focus and prioritise R&D projects which align best with its core competencies and strengths. Finally, in Automotive Catalysts, it is intended to transfer the Heavy-Duty Diesel R&D work to the Hanau site and to discontinue the R&D activities in Hørsholm in Denmark.
“Umicore is navigating a challenging environment where we feel the impact of the complex transitioning of the automotive industry towards electric mobility. Serving our North American customers out of Korea is now clearly the most effective use of our assets. To ensure our company’s long-term competitiveness, we need to make difficult decisions. We commit to support our teams throughout these changes,” says Bart Sap, CEO of Umicore in a press release.
The cost-saving measures come on top of its efficiency program initiated in 2023 and are expected to generate approximately EUR 40 million in annualized savings in 2025.
