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Samsung to drop fuel cell business

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By Kim Yoo-chul

Samsung SDI, the battery affiliate of Samsung Group, said late Tuesday that it will completely exit the fuel cell business in accordance with the group-wide strategy to drop unprofitable businesses.

"Samsung SDI decided to drop fuel cell-related business projects, as the outlook of the market isn't good," a company spokesman said by telephone.

He said Samsung SDI was in talks with a local company to sell the related equipment, though the spokesman declined to specify the name of the potential buyer.

However, industry sources say that it will sell the equipment to Kolon Industries for a "few million dollars."

Kolon Industries said it was approached by Samsung SDI for the deal and confirmed that talks were "underway."

Workers who were involved in Samsung's fuel cell business projects have been moved to other divisions.

Since late last year, Samsung SDI has continued to drop none-core projects to save costs, have a leaner business structure and to focus more on its battery-driven business.

It sold its chemical business to Lotte Chemical and retired some employees via voluntary retirement programs.

In late 2014, Samsung SDI exited the plasma display panel business.

The company developed fuel cells for notebooks based on methanol in 2005; however, demand for these failed to gain as lithium-ion batteries are more affordable, usable, efficient and competitive in terms of costs.

"Kolon Industries has a strong interest in buying SDI-owned fuel cell patents. The money that will be saved from the sale of the fuel cell business will be used to boost energy solution-related businesses such as batteries for electric vehicles (EVs) and energy storage systems," said an official.

Samsung SDI plans to invest more than 3 trillion won in batteries for EVs and the EV-related parts businesses over the next five years in what the company believes is enough to become the world's top battery supplier by 2020.

"We should burn fat in our tissues and bulk up muscles to win from heated competition with our chief rivals," Cho Nam-seong, chief executive of the company, said in his New Year message to employees.

Kim Yoo-chul

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