The market for anode materials used in Li-ion batteries now has an enormous growth potential because of the continuing boom in the global NEV market. Seeing this, companies involved in the supply chain for Li-ion batteries are now proactively developing an anode material business.
Looking at Chinese companies that are involved in the battery supply chain, Zhongke Electric has inked a series of agreements with battery and material suppliers to form joint ventures that will produce and sell anode materials. On September 2, Zhongke announced that its wholly-owned subsidiary Shinzoom has signed an agreement with FinDreams Battery to form a joint venture that will set up 100,000 tons per year of production capacity for Li-ion battery anode materials. FinDreams is a wholly-owned subsidiary of BYD. Zhongke already entered into a similar agreement with EVE in 2021 and CATL earlier this year.
According to Zhongke’s announcement about the joint venture with FinDreams, the registered capital of the new entity is set at RMB 1 billion. Shinzoom and FinDreams will contribute RMB 650 and RMB 350 respectively. The joint venture will focus on the manufacturing of anode materials, and FinDreams is given top priority in terms of supply.
In terms of the capacity building, the joint venture will set up 50,000 tons per year for the first phase. Shinzoom hopes to have the first phase ready for operation in August 2023, or 12 months after the signing of the agreement. While the development schedule could change on account of special circumstances, both parties aims to have the first phase enter operation no later than November 2023 and then ramp up to fully-loaded capacity within three months. As for the second phase that will comprise the remaining 50,000 tons per year, it is expected to enter operation nine months after the activation of the first phase and also achieve fully-loaded capacity within three months.
Zhongke pointed out the joint venture with FinDreams will enable it to expand further into the downstream portion of the supply chain. Moreover, both parties will enjoy mutual benefits from the consolidation of their resources and advantages. FinDreams will bring additional capital to sustain the growth of Zhongke’s anode material business and accelerate capacity building. At the same time, the demand from FinDreams will help Zhongke maintain a high capacity utilization rate.
Established in 2004, Zhongke is producing and selling anode materials through its subsidiary Shinzoom. Its anode materials are mainly purposed for Li-ion batteries equipped in electric cars, consumer electronics, and energy storage systems. Zhongke acquired Shinzoom in 2017 in order to establish a foothold in the anode material market. Zhongke then acquired CH Great in 2018 to extend its presence in the supply chain. To step up the pace of vertical integration, Zhongke also bought a stake in Ya’an New Materials in 2019.
Zhongke has also sought partnership with other Chinese battery suppliers in recent years. It has launched integrated anode manufacturing projects with CATL (100,000 tons per year in Guizhou) and EVE (100,000 tons per year in Yunnan). In addition to these, other integrated anode manufacturing projects that Zhongke is developing include the ones in Anhui (100,000 tons per year) and Sichuan (100,000 tons per year).
Regarding client base, Zhongke has established long-term business relations with the major domestic suppliers for power batteries used in electric cars. They include BYD, CATL, EVE, and CALB. As for foreign clients, Zhongke is supplying products to SK On and is seeking cooperation with Samsung SDI, LG New Energy Solution, and Panasonic.
Zhongke’s revenue from Li-ion battery anodes reached RMB 1.875 billion for the first half of this year, showing a huge year-on-year growth rate of 167.77%. The company’s shipments of anode materials for the same period also grew by 104.54% year on year to 48,300 tons. Note that the actual received shipments amounted to 45,400 tons, showing a year-on-year growth rate of 93.23%.
This article is a translation of a Chinese article posted by 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.