(Yicai) Sept. 28 -- Ningbo Shanshan’s shares rose after the world's largest supplier of electric car battery materials set out plans to expand by building an anode material plant in Finland and acquiring LG Chem’s polarizing film business.
After earlier jumping by as much as 3.2 percent, Shanshan’s stock [SHA: 600884] closed 2.4 percent up at CNY13.90 (USD1.90) in Shanghai today.
Shanshan intends to spend as much as EUR1.28 billion (USD1.34 billion) on building a lithium battery anode material project in Finland and CNY1.4 billion (USD191.5 million) on buying LG Chem's polarizer business and related assets in the Chinese mainland, South Korea, and Vietnam, the firm said in separate statements yesterday.
Unit Shanghai Shanshan Lithium Battery Material Technology will invest in and build the Finnish project in two phases, each with annual production capacity of 50,000 tons and a construction period of 24 months. It will meet the needs of downstream clients and Shanshan’s need to expand overseas and continue to increase its global market share, it said.
North Europe mainly uses energy generated from hydropower and biomass fuels, has low electricity prices, and can get it to major battery clients in Western and Central Europe, Shanshan said. Siting the project in Finland will enable the firm to tap into low-cost clean energy and take advantage of the strategic location to add European clients and meet their needs, it noted.
The project faces risks of financing, fluctuation in raw material prices, and fierce competition in the battery anode material market, Shanshan pointed out.
Demand for new energy vehicles is growing rapidly, boosting demand for battery anode materials, which will likely continue to climb in the second half of this year, Shanshan said in its interim earnings report.
Under the LG Chem deal, Shanshan said its units Shanjin Optoelectronics Suzhou and Shanjin Optoelectronics Guangzhou will acquire the South Korean electric vehicle battery giant’s polarizer business and related assets in the Chinese mainland, Korea, and Vietnam. Polarizers can be used in organic light-emitting diode, automotive liquid crystal, and other displays, it said.
Shanshan was the first Chinese firm to focus on the research, development, and production of artificial graphite anode materials for lithium batteries, with its annual production capacity reaching 700,000 tons last year. It took a stake in LG Chem's polarizer business in 2021 to enter the new sector.
Editor: Martin Kadiev