Shida Shenghua Forms Joint Venture to Add 100,000 Tons per Year of Production Capacity for LiPF6

Shida Shenghua announced on October 13 that it has signed an agreement with Sichuan Zhongfuo Huatai New Material Technology to form a joint venture in Leshan, a city in China’s Sichuan Province. The new entity is named “Zhongfuo Shenghua”.

According to Shida Shenghua’s announcement, the registered capital of the joint venture is RMB 1.2 billion, of which Zhongfuo Huatai and Shida Shenghua account for RBM 792 million and RMB 408 million respectively. Zhongfuo Huatai’s and Shida Shenghua’s corresponding stakes in the joint venture come to 66% and 34% respectively. Through this entity, the two parties will invest around RMB 2 billion in a manufacturing project with a production capacity of 100,000 tons per year for liquid LiPF6 and other supporting facilities.

Shareholding Structure of Zhongfuo Shenghua

Established in July this year, Zhongfuo Huatai is a holding subsidiary of Sichuan Leshan Fuhua Tongda Agro-Chemical Technology, whose core businesses include pesticides and other chemical products for agricultural applications. This September, Shida Shenghua and Fuhua Tongda signed an agreement for the procurement of raw materials and public works services related to an electrolyte manufacturing project.

As for the deal to form a joint venture, Shida Shenghua said both parties will be able to improve their respective competitiveness by leveraging each other’s advantages. Furthermore, the joint venture will contribute to the rapid expansion of the production capacity for LiPF6, thereby enhancing the cost advantage of Shida Shenghua’s electrolyte products. On the whole, this latest collaboration is beneficial to the company’s long-term growth.

Shida Shenghua also said that in the future, the supply of LiPF6 from Zhongfuo Shenghua will be directed to its electrolyte manufacturing projects in Southwest and Central China. Originally, Shida Shenghua was going to develop another (two-phased) manufacturing project that would have a production capacity of 5,000 tons per year for LiPF6. However, the latest project that is being developed through Zhongfuo Shenghua is expected to provide an enough supply of LiPF6 to support the company’s electrolyte production. Therefore, the initial construction and other preparatory works for the other project have now been canceled.

As of now, Shida Shenghua’s operational production capacity for solid LiPF6 has come to 2,000 ton per year. The company currently does not have operational production capacity for liquid LiPF6. Hence, the project under Zhongfuo Shenghua is the 100,000 tons per year of production capacity for liquid LiPF6 that is being set up. This project is scheduled for completion in June 2023.

The announcement on October 13 also stated that Shida Shenghua will be changing its formal name and its short name that is used for listing. The company will be renamed as “Shenghua New Materials Group”, and the name change (including the revision to the listing name) will become effective on October 19 this year. The company explained that the new name more accurately reflects its main businesses, which encompass advanced materials for applications related to new energy and semiconductors. Currently, the company is focusing on the development and manufacturing of Li-ion battery electrolytes, electrolyte solvents, electrolyte additives, Li-ion battery anode materials, and auxiliary materials for Li-on battery cathodes. At the same time, the company is searching for opportunities to expand into the market for chemicals used in the wet processing of semiconductor wafers.

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.