Since late
September, Chinese Guangzhou Tinci Materials Technology Co., Ltd. (Tinci) has
taken several actions that indicate it is attempting to maneuver itself into
the supply chain of Apple and BMW. According to independent China market
research firm CCM, if Tinci is
successful, it is possible it could establish itself as China’s leading
supplier of Li-ion battery electrolyte.
The first signs
that Tinci was making a move to strengthen its Li-ion battery electrolyte
business came on September 23rd, when the company announced that it
had completed a capital increase for its wholly-owned subsidiary Jiujiang Tinci
Materials Technology Co., Ltd. (Jiujiang Tinci).
Jiujiang Tinci is
mainly engaged in the R&D, production and operation of Li-ion battery
electrolyte (6,000 t/a) and crystal lithium hexafluorophosphate (crystal LiPF6)
(2,000 t/a). Through this capital increase, Jiujiang Tinci’s registered capital
increased to USD32.52 million (RMB200 million) from USD16.26 million (RMB100
million).
A week later, on
September 30th, Tinci de-listed another of its wholly-owned
subsidiaries, Suichang Tinci Materials Technology Co., Ltd. (Suichang Tinci). Officials
at Tinci stated that the decision to de-list Suichang Tinci was made in accordance
with the company's overall strategy focusing on the Li-ion battery electrolyte
business, and will help Tinci integrate and optimize its resource allocation,
reduce costs in production and management, and improve its operating benefits.
Meanwhile, also
on September 30th, it emerged that Tinci was planning to make a
private offering to raise further funds.
According to the plan, Tinci will issue 8.18 million shares at most at
approximately USD5.27 (RMB32.40) per share. In total, this offering should
raise an extra USD43.09 million (RMB265 million).
CCM has learned
that Tinci plans to use these funds to buy out Dongguan Kaixin Battery Material
Co., Ltd. (Dongguan Kaixin) for no more than USD32.52 million (RMB200 million),
and also USD7.97 million (RMB49 million) in the construction of a new 6,000 t/a
liquid LiPF6 project. This move suggests a decisive pivoting of
Tinci’s business towards the Li-ion battery electrolyte industry.
Moreover,
according to CCM’s sources, Tinci is not only, or even primarily interested in
acquiring Dongguan Kaixin to expand its Li-ion battery electrolyte business.
Rather, Tinci is very keen to gain access to Dongguan Kaixin’s client base.
Competition in China’s
Li-ion battery electrolyte industry focuses on the quality, not necessarily the
quantity, of clients. This is because, for these Li-ion battery electrolyte
manufacturers, gaining a quality client not only generates revenue, but also
allows the company to learn from its client’s superior technical and R&D capabilities.
At present, Tinci’s
client base is still mainly made up of domestic Chinese enterprises. However,
if it succeeds in acquiring Dongguan Kaixin, Tinci will enter the supply chain
of Amperex Technology Limited (ATL).
Not only is ATL
the major supplier of Li-ion batteries for Apple Inc.’s digital products, it is
also currently co-operating with BMW in a project to develop a power Li-ion
battery for automobiles. In the future, ATL is widely expected to become BMW’s
supplier for its alternative energy automobile business. Entering the supply chain of such prestigious
clients will surely help propel Tinci up the technology ladder, expand its
business in both domestic and overseas markets, and possibly even allow it to
seize the title of China’s leading Li-ion battery electrolyte supplier.
Tinci also plans
to increase its production capacity of LiPF6 in the near future.
According to a statement released by Tinci, the liquid LiPF6 project
is designed mainly to deal with the rapid development in the alternative energy
automobile industry and meet fast-growing downstream demand. The construction
period for this liquid LiPF6 project is about 1.5 years and construction
should be completed in 2016.
Once completed,
the production capacity of this project will be 6,000t/a of liquid LiPF6,
which is the equivalent of 2,000t/a of crystal LiPF6. This will
double Tinci’s total capacity, which currently stands at 2,000 t/a of crystal LiPF6.
China’s LiPF6
market is currently suffering from overcapacity, but the rapid development of
the alternative energy automobile industry is expected to drive up demand for Li-ion
battery electrolyte. According to CCM, LiPF6 supply and demand in
the LiPF6 market should balance out by 2015.
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This
article was provided by CCM, a leading provider of data and business
intelligence on China’s chemicals market. CCM has launched China Li-ion Battery E-News, a new e-journal dedicated to analyzing all
the latest news and trends in China’s Li-ion battery industry. For more
information on CCM and China Li-ion Battery E-News, please visit www.cnchemicals.com or contact econtact@cnchemicals.com
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