On October 13, Shida Shenghua announced a
plan to cooperate with Sinochem Quanzhou in investing in the construction of a 440,000
t/a new energy material project in Quanzhou City, Fujian Province. According to
Shida Shenghua, the project will be divided into two phases when it is implemented.
Shida Shenghua will account for 55% of equity in the joint venture. The company
believes that the investment will consolidate the company’s core position in the
carbonate industry and that it will also accelerate business development in the
company sector focused on lithium-ion battery materials.
In recent years, Shida Shenghua’s business in new chemical energy has rapidly developed. The main products of the company include carbonate products such as dimethyl-carbonate (DMC) and propylene carbonate, special electrolyte additives, as well as methyl tert-butyl ether (MTBE). In China, the company has become a major supplier that provides high quality raw solvent materials to manufacturers of lithium-ion battery electrolytes.
According to the announcement, Shida
Shenghua plans to invest in producing 440,000 tons of alternative fuel each
year into the project for its joint venture with Sinochem Quanzhou, a total
monetary investment of about USD 184.3 million (RMB 1.3 billion). The project
is divided into two phases, and the company will first invest USD 112.5 million
(RMB 794 million) into the construction of 120 thousand t/a worth of ethylene carbonate
devices and 100 thousand t/a worth of DMC devices. The first phase is estimated
to be completed by April 2021, with a 19 month construction period. The company
will start the second phase, which will last for 12 months, depending on the
market conditions. A set of 120 thousand
t/a worth of ethylene carbonate devices and a set of 100 thousand t/a worth of DMC
devices are also included in the second phase project. It is predicted that
Shida Shenghua will earn USD 315.5 million (RMB 2.226 billion) from this
venture, with a net profit of USD 30 million (RMB 212 million).
Shida Shenghua said that developing lithium-ion
battery electrolytes is becoming an essential part of the company’s main
business. Based on the promising future of the alternative fuel vehicle
industry, the alternative fuel material project will help the company obtain a
market advantage in the carbonate business, and it will also increase the
income of the company. It is a strategic development plan for the company.
Some resources have reported that Shida Shenghua has been focusing more on the alternative fuel production line this year, with the growing development of the alternative fuel vehicle industry. The company continues to invest more resources in the business of lithium-ion battery electrolytes.
In March 2019, Shida Shenghua announced a
plan to cooperate with PCC Rotika, a company in Poland. Under this plan, the
companies aim to produce 20 thousand tons of ethylene carbonate per year for
their project, and Shida Shenghua plans to use this opportunity to expand its
market into Europe. In August, Shida Shenghua invested USD 79 million (RMB 560
million) in Dongying Harbor Economic Development Zone for the construction of a
facility to produce 50 thousand t/a DMC. In the meantime, Shida Shenghua established
a sole subsidiary in Kenli District, Dongying City, investing USD 23 million (RMB
160 million) into the construction of 5,000 t/a battery additive project.
After the battery additive project, the DMC
equity capacity of Shida Shenghua increased 1.5 times from a previous capacity
10,500 tons. And Shida Shenghua will become the first enterprise in China that
provides five types of carbonate additives, lithium electrolyte salts as well
as related additives.
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