In early September 2019, DFD Chemical Co., Ltd. (DFD) planned to spend USD 10.86 million (RMB 77 million) in acquiring 70% shares of Luoyang Lanbao Fluoride Industry Co., Ltd (Luoyang Lanbao) in order to increase supplies of raw materials for the company itself. Once the transaction is completed, Luoyang Lanbao will become a holding subsidiary of DFD.
It is reported that the 70% shares of Luoyang Lanbao come from two different shareholders, which are respectively Siyuan and Shunliban. 46.92% shares of Luoyang Lanbao from Siyuan and 23.08% from Shunliban will be transferred to DFD at the value of USD 7,277,292 (RMB 51,612,000) and USD 3,579,708 (RMB 25,388,000). After the transfer of shares, DFD will be the biggest shareholder of Luoyang Lanbao, representing 70% of the total shares, while Siyuan will account for 30%.
Lanbao is regarded as a top fluorite mining and beneficiation enterprise in
China. The company owns 3 fluorite concentrators and 6 mines in Luoyang,
Chongqing and other areas. With reserves of 3 million tonnes of fluorite, the
company can produce 60 thousand tonnes of flotation fluorite powders annually.
Fluorite plays an indispensable role in the production of fluorine. At present, DFD needs to purchase about 500 thousand tonnes of fluorite powders for the chemical production of fluorine each year. Therefore, Luoyang Lanbao’s annual capacity of fluorite powders will satisfy the needs of DFD.
According to DFD, the company has a complete industrial chain of "fluorite - high purity hydrofluoric acid - lithium fluoride/ aluminium fluoride - lithium hexafluorophosphate - lithium batteries". The acquisition of Luoyang Lanbao will be beneficial to integrating fluoride resources by increasing supplies of the chemical. In this way, the company’s market competition and economies of scale will get enhanced to a better degree. What’s more, with more guarantee of raw materials, the industrial chain will be improved, which is a good promotion of the competition of products and a consolidation of sustainable development of the company. In other words, more supplies of fluoride will give a better support to the high-end products of DFD, such as lithium hexafluorophosphate and electronic hydrofluoric acid.
In terms of the future, DFD expressed that the company will increase more inputs in Luoyang Lanbao by transforming the technology and strengthening the research and development. This will certainly further improve the production efficiency as well as ensure sufficient supplies of fluoride in the future.
Founded in 1999, DFD is a Chinese high-tech enterprise with a focus on research and development in chemical elements, including fluoride, lithium and silicon. The four main products of the company consist of inorganic fluoride, electronic chemicals that contain fluoride, lithium batteries and electric vehicles.
In the field of fluoride industry, DFD created an own industrial chain with lithium hexafluorophosphate, an essential raw material of lithium batteries. This achievement has made DFD a top enterprise with the best sales volume in whole China. Its production of lithium batteries has been developed into a large-scale production with the capacity of 300 million ampere hours.
For more information about China’s fluoride market, please have a look at our monthly newsletter China Fluoride Materials Monthly Report.