Affiliate goes all out to provide safer batteries
Samsung SDI is expected to post a major turnaround this year, overcoming a recent battery fiasco surrounding the ill-fated Galaxy Note 7 smartphones.
The battery affiliate of Samsung Group suffered its worst-ever crisis last year when the flagship Samsung smartphone was mired in a scandal surrounding its exploding batteries.
Under a group-wide policy, however, the company is rapidly regaining trust from its major clients here and abroad. Such efforts are expected to underpin Samsung Electronics’ attempt to shake off the Note 7 crisis of last year.
After Samsung Electronics announced its global recall of the Note 7 in September, the company established an emergency taskforce at its manufacturing facility in Cheonan, south of Seoul, in a desperate effort to stop any recurrences of a similar battery fiasco.
At that time, the company allocated more than 100 workers to the taskforce, conducting three-way safety check processes from development and manufacturing to post-production quality inspection.
“We have invested more than 150 billion won ($134.6 million) to enhance safety measures since the Note 7 debacle,” a Samsung SDI official said. “We have also teamed up with a third-party inspection organization to certify that our safety system has improved.”
The efforts have begun to take effect, as the firm’s profits are expected to normalize at least from the second half of the year, according to the company.
“Our polymer battery sales have recently recovered to a similar level from the time before the Note 7 fiasco erupted,” the company official said.
“We attribute the swift recovery to our instant response to tighten the safety measures.”
Market experts were also on par with the rosy outlook.
“Due to the robust sales of the small-sized battery business, Samsung SDI is expected to turn a profit from the second quarter of this year,” Kwon Sung-ryul, an analyst from Dongbu Securities, said in a report.
The prediction comes at a critical time when the company has posted quarters-long deficits, and need to post a major turnaround by expanding its sales channels to reach overseas clients.
The brokerage firm estimated Samsung SDI to report 48 billion won in the second-quarter operating profit, driven by the improved profitability of the small battery business.
The strong sales record of Samsung Electronics’ flagship smartphones is also raising the firm’s potential rebound in the second quarter.
Samsung is set to unveil the latest version of the premium Note device — equipped with SDI batteries — next month. Sales of the Note devices have in recent years served as the firm’s major cash cow.