Construction Begins on HSC’s RMB 5 Billion Project in Hubei for Production of Electrolyte Additives – EQ Mag
Huasheng Xianghe New Energy Materials held a ceremony to mark the start of the construction of its RMB 5 billion project in China’s Hubei Province. Spanning an area of 500 mu, the project is located in Yunmeng County, which is under the administration of the province’s Xiaogan City.
The project comprises facilities for the manufacturing of the additives that are incorporated into the electrolytes of Li-ion batteries. Huasheng Xianghe New Energy is an entity under HSC New Energy Materials that is also a supplier for electrolyte additives. This event was reported by local news media.
The project, which entails a total investment of RMB 5 billion, will be developed in multiple phases. The first phase involves setting up the production capacity for electrolyte additives over an area of 106 mu. The investment in the first phase comes to RMB 400 million.
Established in 1997, HSC develops, manufactures, and sells electrolyte additives, chemicals for electronics-related applications, and special organosilicon compounds. Regarding electrolyte additives, HSC’s main offerings are vinylene carbonate (VC), fluoroethylene carbonate (FEC), and lithium bis(oxalato)borate (LiBOB). The company already has a significant coverage over the Chinese market for electrolyte additives. At the same time, it is exporting products to other countries and regions such as Japan, South Korea, the US, Europe, and Southeast Asia.
In terms of clients, HSC has direct business relations with Mitsubishi Chemical, BYD, CATL, Tinci, GTHR, and Shanshan. These domestic and foreign clients are the major participants in the industry chain for Li-ion batteries. It is also worth noting that through a share transfer agreement, BYD obtained a 1.98% stake in HSC in February 2021.
Turning to production capacity, HSC currently has a base in Zhangjiagang (Phase 1 and 2). It also leverages another wholly-owned subsidiary named Taixing Huasheng Fine Chemical. All in all, HSC is capable of outputting as much as 5,000 tons of electrolyte additives (i.e., VC and FEC) per year.
To further scale up its production, HSC launched its IPO in the Shanghai Stock Exchange this July and is now listed on the Science and Technology Innovation Board of the exchange. The fundraising target of the IPO was RMB 700 million, which is mainly purposed for adding 6,000 tons per year of new production capacity for VC and 3,000 tons per year of new production capacity for FEC. A portion of the proceeds from the IPO is also purposed for building an R&D center as well as other facilities that support the company’s business operations.
Lastly, regarding HSC’s financial performance, its realized revenue and net profit for this third quarter came to RMB 190 million and RMB 24.3313 million respectively. As for the first three quarters of this year, the company’s realized revenue and net profit reached RMB 703 million and RMB 226 million respectively.