BCC, a major Chinese supplier for various chemicals and advanced materials, announced on November 11 that it will be investing a total of RMB 750 million to build production plants for Li-ion batteries and graphite materials. The development of these projects will be carried out by its subsidiary Higee Energy and sub-subsidiary Ningxia Baichuan New Materials. The former will spend RMB 470 million to build a plant with an annual production capacity of 2GWh for lithium-ion battery cells and packs. The latter will spend RMB 280 million to build a plant with an annual production capacity of 15,000MT for graphite anode materials (of which 10,000MT is specifically for graphitized carbon materials). This announcement was first reported by Chinese websites covering renewable energy news.
According to BCC’s schedule for the development of these two projects, the battery production plant will take around 10 months to build. Once in operation, the battery production plant is projected to generate an annual post-tax profit of RMB 83.37 million. Taking taxes into consideration, the investment recuperation period for the battery production plant is estimated around 3.45 years (including the plant construction period). The breakeven point of the battery production plant as a percentage of capacity is estimated at 62.8%.
As for the graphite production plant, it will take about a year to finish construction. Once in operation, its annual post-tax profit is projected to reach RMB 147.5571 million. Its investment recuperation period is estimated around 2.54 years (excluding the plant construction period). Its breakeven point as a percentage of capacity is estimated at 37.61%. Compared with the battery production plant, the graphite production plant is expected to offer faster return on investment.