KOTA KINABALU, Aug 6 — When SK Group, South Korea’s second largest conglomerate, was looking to expand its copper foil productions overseas, Kota Kinabalu (KK), known more for its sunsets and islands, was not the first place that came to mind.

That was where Malaysian Investment Development Authority (Mida) came in, introducing the group to Sabah’s government who jumped at the opportunity.

In May last year SK Group's SK Nexilis, the world’s largest copper foil maker, started production at its first overseas factory at the Kota Kinabalu Industrial Park, the biggest copper foil factory in the world.

The factory is capable of producing up to 57,000 tonnes of copper foil annually.

"We have started part production which will be sent to clients and will then be audited. We expect to be fully operational by September or October,” SK Nexilis’s strategy and planning manager Boo Jae-cheol told Malay Mail in a recent interview.

Last October, the Fortune 500 company exported its first shipment of 80 tonnes with an export value of RM1.9 million from Sabah to North America.

At its full capacity, the plant will contribute some RM3 billion to the state’s gross domestic product (GDP).

Its second overseas plant will be in Stalowa Wola, Poland which will have similar or slightly lower capacity.

The company also boasts the world’s longest, thinnest and widest copper foil, as thin as four micrometres, which can be described as one-fifth the thickness of clear food wrap.

SK Nexilis’s copper foil will be used exclusively for electric vehicles globally.

Currently the group has a 22 per cent market share in copper foil, with global demand predicted to grow exponentially with the use of electric vehicles.

Investment in Kota Kinabalu

The factory is set on 100 acres (roughly the size of 75 football fields) in KKIP next to China’s Kibing solar plant which may help with its green energy plans.

"One of the main attractions for us to invest in KK was the readily available land. It was a good size, and already cleared which saved us time and expenses to clear land for construction,” said Boo.

Other considerations were English-speaking labour, and the favourable terms and conditions such as lower electricity tariffs, and corporate tax exemption.

"But I think the biggest reason is the strong commitment and investor friendly policies of the state government,” said Boo.

The RM2.3 billion plant will almost undoubtedly be the state’s largest power consumer with an estimated 70MW power usage with an up to RM122 million power bill per year which gives the state utility company Sabah Electricity Sdn Bhd a 10 per cent sales increase.

In return, SK Nexilis hired 95 per cent of its 350 strong work force from the Malaysian market, mostly Sabahans, with only key management positions held by South Korean nationals.

"It is imperative that we use a local workforce instead of bringing in Koreans from home. But we have to bridge the cultural and language divide, so we have sent some of the staff to Korea for a cultural exchange and help them understand the company better.

"We also have language classes so they can deal with the headquarters on their own sometimes,” said Boo.

The company is also expected to bring in more investment from Korea such as subsidiaries and complementary industries to help maximise the capacity and efficiency of its raw material processing.

"With the growing demand for copper foil worldwide increasing with the use of EV, we wanted to expand our production, but we needed to do it at lower costs.

"The plant in Sabah will make us more cost-effective while our plant in Poland is also strategically located to reach the European market. That will help us be more competitive in this market,” said Boo.