Korea Zinc (KRX:010130), the world’s leading non-ferrous smelting company, successfully hosted its first investor relations event, the “2023 Investor Day,” and presented its future vision and growth strategy for the next ten years to stakeholders.
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Korea Zinc Holds its First Investor Day, Announcing a Revenue Target of KRW 25.3 trillion for 2033 (Photo: Korea Zinc)
The event was held at the Conrad Hotel in Yeouido, Seoul from 2 p.m. on the 7th, with presentations devoted to three topics such as smelting business, Troika Drive, and sustainable management. The event was held amidst great interest from investors, as analysts projected that Korea Zinc will benefit most directly from the recent announcement of the US government’s guidance on Foreign Entities of Concern (FEOC) and was followed by a heated Q&A session. Korea Zinc has moved past its perception as a dividend stock with stable performance, to a growth stock with great potential.
Through the Investor Day, Korea Zinc announced its ambition to expand into new businesses, taking a step further from its past growth strategy based on innovation in the smelting business and leveraging its leading smelting technologies and capabilities accumulated over the past half-century in the field of non-ferrous metal smelting. Korea Zinc unveiled a ‘quantum jump’ strategy of increasing its revenue 2.5-fold to KRW 25.3 trillion by 2033. To this end, the company will bring sales from the Troika Drive businesses to KRW 12.2 trillion by 2033, contributing almost half of the total revenue of 2033. Korea Zinc expressed the confidence to achieve an average annual growth rate of 10% over the next 10 years.
Founded as a non-ferrous metal smelter in 1974, Korea Zinc posted record-high earnings in 2022 with positive operating results for the 95th consecutive quarter. Looking to the next 10 years, Korea Zinc plans to maximize profitability by expanding the sales of high-purity electrolytic copper and semiconductor sulfuric acid in the smelting business and secure future growth drivers such as renewable energy, secondary batteries, and resource recycling, building on its competitiveness in the smelting business. At the same time, the company intends to fulfill its role as a global leader through ESG management. By doing so, Korea Zinc aims to achieve its revenue target of KRW 25.3 trillion in 2033 and continue its journey to carbon neutrality in 2050.
Smelting Business
For the smelting business, which displayed positive operating results for the 95th consecutive quarter since 2000, Korea Zinc pledged to focus more on profitability and competitiveness and defend its dominant position in the global non-ferrous metal smelting market. Korea Zinc is the world’s largest smelter, singlehandedly commanding 8.4% and 9.3% of the global zinc and lead markets, respectively, in the fourth quarter of 2022, according to Wood Mackenzie, a global research firm.
Korea Zinc plans to increase production efficiency by rationalizing its production processes to address variables such as declines in treatment charges (TC) and increases in electricity prices. Korean Zinc will deploy an integrated process designed to maximize the recovery of four major non-ferrous metals, i.e., zinc, lead, copper, and nickel with the scheduled completion of an all-in-one nickel refinery in 2026. Korea Zinc also presented electrolytic copper and semiconductor sulfuric acid as future growth drivers for the smelting business. With these measures in place, Korea Zinc targets to expand smelting revenue to KRW 13 trillion by 2033.
Troika Drive
For the Troika Drive businesses, Korea Zinc will proactively seek new business opportunities, taking advantage of its competitive smelting technology. To drive a paradigm shift to ‘Green Metal’, Korea Zinc is committed to actively promoting three businesses—renewable energy/green hydrogen, secondary battery materials, and resource recycling. In addition, the company will take full advantage of the positive impact of the US government’s recent guidance on Foreign Entities of Concern (FEOC), to expand its business. In doing so, Troika Drive businesses target to achieve a revenue of KRW 12.2 trillion by 2033, with a steady investment of KRW 11.9 trillion over the next 10 years.
Sustainable Management
The 2050 Carbon Neutrality Roadmap was the highlight of Korea Zinc’s ESG management strategy designed to ensure sustainable management and establish a green production system. As part of the roadmap, Korea Zinc plans to reduce carbon emissions by 40% from 2020 to 2040 and an additional 60% by 2050.
For safety management, Korean Zinc expanded its safety-related budget by 2.5-fold year-on-year to KRW 100 billion and increased the number of safety-related personnel 5-fold from 26 in 2022 to 131 persons in 2023. Meanwhile, led by the Safety Innovation Committee, Korea Zinc is set to chart out a roadmap in 2024 to enhance workplace safety and health with full implementation scheduled for 2027. Korea Zinc will also align its supply chain with global ESG standards on environment, human rights, and safety and further expand responsible minerals sourcing.
Financing & shareholder Return
Korea Zinc also unveiled its shareholder return policy as well as plans to secure financing for existing and new businesses in the mid- to long-term. For the next 10 years, Korea Zinc will implement various shareholder return policies valued at around KRW 4 trillion, including dividend payout, share buyback, and cancellation.
The two-hour IR event was well-received by attendees. Korea Zinc presented various customized response strategies amidst various external threats such as the global economic downturn, which was enough to gain the market’s trust in the company’s future growth. In particular, Korea Zinc presented growth targets for the next 10 years that exceeded expectations and expanded attention beyond its smelting business, toward its various businesses such as secondary batteries and resource recycling.
In addition, the company broke existing stereotypes that it had a conservative culture regarding disclosures, only providing minimal information, and differentiated from other companies by providing detailed data and figures.
“Looking to the next 10 years, Korea Zinc is committed to concentrating its resources and capabilities on the Troika Drive businesses on top of the existing smelting business. Korea Zinc will maximize shareholders’ value and ensure sustainable management, while continuously engaging shareholders, investors, and other stakeholders,” said Korea Zinc’s spokesperson upon the successful hosting of its first Investor Day.
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