On July 4, Jiangsu Ruitai New Energy Materials (Co. Ltd.) announced that its holding subsidiary Zhangjiagang Guotai Huarong Chemical New Materials (Co. Ltd.) has signed a volume and price agreement with FREYR Battery Norway (AS). Under the agreement, Guotai Huarong will supply Li-ion battery electrolyte to FREYR from July 2023 to December 2028. The total value of the transaction is estimated around CNY 3.419 billion (USD 526 million). Since this is a reservation agreement, the actual procurement quantity and price are expected to be negotiated periodically.
FREYR focuses on the development and manufacturing of energy storage systems. The company aims to provide industrial-scale clean energy solutions for the fast-growing markets of EVs, energy storage, and marine transportation. Ruitai said the signing of the reservation agreement will have a positive effect on its ongoing expansion in the international market. The agreement is also an indication that the company is successful in the execution of its growth strategy and has created a win-win scenario with FREYR as a partner. Furthermore, FREYR’s demand will contribute to Ruitai’s financial performance in the coming years.
Established in 2017 as a holding subsidiary of Chinese conglomerate Jiangsu Guotai International Group, Ruitai was formally listed on the Second (GEM) Board of the Shenzhen Stock Exchange this June 17. Ruitai focuses on the development, production, and sales of Li-ion battery electrolyte, supercapacitor electrolyte, electrolyte additives, silane coupling agent, and other advanced materials. The first four of the aforementioned products are its main offerings. Also, the company was ranked among the top three suppliers in China and worldwide for Li-ion battery electrolyte in the past three years.
Ruitai’s major clients include CATL, LG Chem, ATL, EVE, and Panasonic. The top five clients accounted for 79.37%, 78.94%, and 86.96% of the company’s operating revenue for 2019, 2020, and 2021 respectively. The company thus has a high degree of customer concentration. In particular, the revenue from sales to CATL came to CNY 2.575 billion for 2021, showing an eight-fold increase from 2020. Correspondingly, CATL’s share of the operating revenue rose from 15.71% in 2020 to 49.49% in 2021.
Regarding production capacity, Ruitai currently possesses around 70,000 tons per year for Li-ion battery electrolyte. Its new electrolyte plant in Poland (Prusice) is currently in the pilot production stage and will be able to ramp up to 40,000 tons per year. The plant in Prusice will produce electrolyte for Li-ion EV power batteries. Ruitai is also implementing numerous other capacity expansion projects. While the company is receiving plenty of electrolyte orders, it will expand its business operations and raise output in accordance with the demand from its clients and the wider market.
In China, Ruitai has been aggressively setting up new production facilities. On January 27 of this year, Guotai International Group announced that Ruitai will build a production base in Zhejiang Province (Quzhou) through a newly formed local subsidiary. The base will have a production capacity of 300,000 tons per year for Li-ion battery electrolyte, and the total investment in this project is estimated around CNY 1.51 billion (note that the investment in the Quzhou subsidiary is estimated around CNY 500 million).
Then, on May 30, Guotai International Group unveiled another new base that will be located in Sichuan Province. Again, Ruitai will invest CNY 200 million to establish a wholly-owned subsidiary in Zigong. The new base will have 300,000 tons per year of production capacity for Li-ion battery electrolyte and 2,000 tons per year of electrolyte recycling capacity. The total investment in this project is estimated around CNY 1.511 billion.
Additionally, Ruitai has been proactively raising its production capacity for lithium hexafluorophosphate. In December 2021, Ruitai formed a joint venture with Jiangsu Xintai Material (Co. Ltd.) and ATL. Through the joint venture, they will set up 30,000 tons per year of production capacity for materials related to lithium salts (e.g., lithium hexafluorophosphate, lithium fluoride, and calcium chloride). The total investment in this project is estimated around CNY 3 billion. According to Ruitai’s plan for the 14th Five-Year Plan, the company will be establishing many production sites in China, Europe, and other parts of the world so as to rapidly build up its production capacity for the key materials used in Li-ion batteries. In the home country, Ruitai will be placing new facilities in provinces including Jiangsu (Zhangjiagang), Fujian, Zhejiang, and Sichuan.
In terms of performance, Ruitai has been making massive gains in sales of Li-ion battery electrolyte. The CAGR of the combined revenue of the company’s main businesses reached 77.36% during the period from 2019 to 2021. For 2021, Ruitai’s revenue rose by 186.66% YoY to CNY 674 million. Its net profit also climbed up by 126.12% YoY. For the first half of this year, the company projects its revenue to reach CNY 3.5-3.9 billion and register a YoY growth rate of 96.88-119.38%. Its net profit for the same period is projected to come to CNY 540-590 million, showing a YoY growth rate of 215.66-244.89%.
This article is a translation of a Chinese article written by Martin at TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain. Some Chinese names are transcribed into English using Hanyu Pinyin.