Ford and its partners, who are slowing down a flagship battery sector project in Bécancour, are each facing significant financial challenges, noted The Press. This billionaire construction site is in neutral while several floors have emerged from the ground.
What there is to know
The cathode factory project of Ford and two South Korean partners is on hold in Bécancour.
This turnaround is attributed to technological issues, according to what the promoters told the Legault government.
However, they each face significant financial challenges, noted The Press.
A quarterly loss of US 1.3 billion in the electric segment at Ford, plummeting sales at EcoPro BM and several quarters in red ink at SK On: the electric shift of these three multinationals is costly.
The Press revealed, on April 30, that the American automobile giant and its two South Korean partners were slowing down the construction of their Quebec cathode factory – the positive pole of a lithium-ion battery. According to the Legault government, the promoters attribute this decision to an analysis of “the best technological option” to deploy in Bécancour1.
A week after this slowdown, several questions remain unanswered. The three companies did not provide any details, particularly on the technological issue. The National public relations firm, which represents EcoPro, limited itself to transmitting a “joint declaration of partners”.
“The construction of the cathode factory in Bécancour continues,” we can read. The three joint venture partners are actively engaged in discussions aimed at optimizing operations. »
At the passage of The Press on the site last Friday, work was nevertheless stopped. On Monday, it was not possible to know who was taking over from AtkinsRéalis (formerly known as SNC-Lavalin) as project manager of the site and to have an idea of the sums injected so far. present in construction.
Avec étonnement, le 29 avril dernier, la multinationale québécoise annonçait qu’EcoPro avait demandé la « cession du contrat de sous-traitance ». AtkinsRéalis ajoutait que cette décision émanait de « raisons indépendantes de [sa] will and not linked to [sa] performance “.
“We kindly ask you to suspend, in a safe manner, and while minimizing the resulting costs, the execution of the subcontracting work until you receive new instructions,” writes the engineering firm, in a letter that we were able to consult.
Lots of red
The most recent quarterly results from Ford, EcoPro BM and SK On demonstrate the challenges facing each of these companies.
Specializing in batteries, SK On, which is part of the SK Innovation conglomerate, continues to be loss-making. Its loss reached 245 million US dollars at the end of the first three months of the year. Involved in projects all over the world, the company believes it can return to balance in the second half of the year. She must nevertheless tighten her belt.
“Facing the possibility of a late recovery in demand for electric vehicles, we are improving our cost structure through optimization and stricter management,” said SK On Chief Financial Officer Kyung- Hoon Kim on April 29 during a conference call with financial analysts.
The battery materials specialist EcoPro BM continues to reap profits, but their decline is dizzying. Released on May 3, its first quarter results showed a 73% plunge in operating profit, which stood at US$245 million. Revenues were US715 million, down 52% compared to the first quarter of 2023.
Without offering forecasts, EcoPro BM also stressed that it anticipated “a slower recovery in demand” than expected from cell and battery manufacturers this year.
It’s difficult to see clearly the strategy of Ford and its partners, believes Yan Cimon, full professor of strategy at the faculty of administrative sciences at Laval University. One thing is certain, the “movement of funds” towards electrification “is going to happen”.
“The fact that AtkinsRéalis demobilized the site [à Bécancour], this is the slightly more difficult end of the story, underlines Mr. Cimon. This means that the project will probably take longer. »
Partnership not yet established
Furthermore, eight months after the announcement of the 1.2 billion project in Bécancour – financed to the tune of 640 million by Quebec and Ottawa – the three promoters have still not sealed the joint venture between them, noted The Press. EcoPro BM continues to be the sole indirect sponsor of the EcoPro CAM Canada limited partnership.
In August 2023, however, the promoters indicated that Ford and SK On would become sponsors of the entity after finalizing negotiations. Despite the start of work in Bécancour, Ford and SK On continued to be delayed. At the time of writing, it was not possible to find out why.
Led by General Motors (GM) and POSCO, the other cathode factory project under construction in Bécancour is not in this situation. According to the Registrar, these two companies are shareholders in Ultium Cam, the entity created to operate the complex.
With the collaboration of Francis Vailles and Hugo-Sébastien Aubert, The Press
1. Read “Ford plant construction site put on hold”
Learn more
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- 2026
- Expected year of start-up of the plant in Bécancour. This deadline will likely be pushed back.
Source : THE PRESS
- 13.6 million
- Price paid for the land for the complex in the industrial and port park in Bécancour
Source : the press