(Yicai Global) July 24 -- Ningbo Ronbay New Energy Technology has been given the greenlight to more than triple the yearly output of the cathode materials and precursors used in electric car batteries that it makes at its factory in South Korea from the local government, paving the way for the Chinese battery materials supplier to better meet growing demand from overseas clients.

Rongbay has been given the go-ahead by the Saemangeum Development and Investment Agency to hike its yearly production of ternary precursors and the supporting material sulfate to 80,000 tons each, the Ningbo, southeastern Zhejiang province-based company said yesterday.

Ronbay currently has an annual capacity of 20,000 tons of high-nickel cathode materials and 6,000 tons of precursors at its factory in South Korea’s Saemangeum National Industrial Complex, which also offers recycling services. it said.

The capacity expansion will allow Ronbay to leverage South Korea’s favorable trade agreements with Europe and the US, which have enabled the East Asian country to become one of the main suppliers of batteries and battery materials to these markets, Rongbay said.

Rongbay's South Korean base enjoys zero tariffs on its exports to Europe and the US, while its China-based plants are slapped with a 25 percent tariff on exports to the US and 6 percent to Europe, it said in its 2022 annual report. The project will help bring in more clients from North America, Japan, South Korea and Europe, it added.

The facility’s construction and operation, though, are still subject to approval by other government agencies, so there remains a degree of uncertainty, Rongbay said.

Rongbay has four production bases for cathode materials, including the one in South Korea, with a combined annual capacity of 250,000 tons. Last year, the firm produced more than 90,000 tons of high-nickel cathode materials, which generated a 48.5 percent leap in net profit from the year before to CNY1.4 billion (USD194.8 million), while revenue nearly tripled to CNY30.1 billion (USD4.2 billion).

The news did little to boost Ronbay’s share price [SHA:688005], which was trading down 2 percent at CNY48.26 (USD6.70) as of 11.30 a.m. China time today.

Editor: Kim Taylor