(Yicai Global) Nov. 28 -- SK Group, one of South Korea's largest conglomerates, has become the second-largest shareholder in a Chinese battery materials maker as it looks to expand into the powertrain battery sector in the world's largest electric car market.

The Seoul-based firm, which ranks 84th on the Fortune Global 500, will spend KRW270 billion (USD239 million) on shares in Lingbao Wason Copper Foil, the buyer said in a statement yesterday.

The Chinese power battery market is growing rapidly and SK wants to nurture future growth by maintaining control of the supply chain, a spokesperson for the firm told Yicai Global. The company expects the move will give it a larger share of the Chinese market.

Henan province-based Lingbao Wason makes high-precision electrolytic copper foil for binary power batteries and outputs about 30,000 tons a year to the likes of Panasonic Electric Works, LG Chemical, Samsung and Contemporary Amperex Technology, or CATL.

Electric cars need about 40 grams of the foil in their batteries, and as new-energy vehicles become ever more popular, demand for copper foil is on the rise. It takes advanced engineering equipment to product the foil -- which is about 15 times thinner than a human hair -- and only a few companies around the world have the technology to make it. Lingbao Wason is the biggest of those in China.

It posted an operating profit of USD55 million last year on revenue of USD302 million, making it one of the industry's most profitable firms, and has plans to go public.

SK has made several moves in the power battery field recently -- including opening an American factory and investing in China -- as it looks to make up for time lot by entering the sector late, analyst Lee Seon Yep of South Korean Shinhan Investment said. It will offset the initial cash investment via its SK Innovation unit and start turning a profit in about 2022, he forecast.

Several of SK's senior managers have compared the electric car battery industry to the chip sector -- the group's highly profitable core business -- so are clearly optimistic about the its future, he added.

Editor: James Boynton