OCI Group Boosts Polysilicon Production in Malaysia
In a strategic move to outpace its Chinese competitors, South Korea’s OCI Group is significantly expanding its polysilicon facility in Sarawak, Malaysia. The expansion is set to capitalize on the region’s lower utility bills, labor costs, and favorable tax conditions. OCIM Sdn. Bhd., OCI’s fully-owned Malaysian subsidiary, is increasing its production capacity for solar-grade polysilicon at the Samalaju Industrial Park.
During a site visit on April 25, journalists observed a flurry of activity with construction equipment, highlighting the rapid progress of the expansion. OCI has committed to investing 850 billion won to enhance the output from 35,000 tons to 56,000 tons annually by 2027. Chairman Lee Woo-hyun also revealed plans to diversify the company’s portfolio, including a new polysilicon factory for semiconductor-grade material.
OCIM has been a trailblazer in the 8,000-hectare industrial complex, located about 60 kilometers from Bintulu, Sarawak. The company’s success since taking over from Tokuyama Corp. in 2017 has not only turned around the performance of the facility but also attracted other major players to the region.
The strategic location in Malaysia offers significant cost advantages. Kim Dong Moon, OCIM’s plant manager and chief technology officer, pointed out that electricity costs are a mere third of those in South Korea, which greatly contributes to maintaining price competitiveness. Furthermore, corporate tax exemptions and significantly lower labor costs compared to South Korea have made the location an attractive hub for energy-intensive industries.
OCIM’s success story is underscored by its impressive financial performance, with operating profits reaching 536.3 billion won in 2022. This financial upturn is partly attributed to the US sanctions on Chinese polysilicon under the UFLPA, which has made OCIM a key player in the global supply chain for solar modules.
The company’s strategic investments and operational excellence have set a precedent in the Samalaju Industrial Park, drawing global companies to follow suit. With China’s LONGi Green Energy Technology nearing completion of its own plant and Wenan Steel initiating construction works, Sarawak is rapidly becoming a hotspot for industrial growth.
Contact Woo-Sub Kim at duter@hankyung.com for more information. This article was edited by Jongwoo Cheon.
