In early
September 2019, DFD Chemical Co., Ltd. (DFD) planned to spend USD 10.86 million (RMB 77
million) in acquiring 70% shares of Luoyang Lanbao Fluoride Industry Co., Ltd
(Luoyang Lanbao) in order to increase supplies of raw materials for the company
itself. Once the transaction is completed, Luoyang Lanbao will become a holding
subsidiary of DFD.
It is
reported that the 70% shares of Luoyang Lanbao come from two different
shareholders, which are respectively Siyuan and Shunliban. 46.92% shares of
Luoyang Lanbao from Siyuan and 23.08% from Shunliban will be transferred to DFD
at the value of USD 7,277,292 (RMB 51,612,000) and USD 3,579,708 (RMB 25,388,000). After the transfer of shares, DFD will be the
biggest shareholder of Luoyang Lanbao, representing 70% of the total shares,
while Siyuan will account for 30%.
Luoyang Lanbao possesses 3 million tonnes of
fluorite resources, with 3 concentrators and 6 mines in China
Luoyang
Lanbao is regarded as a top fluorite mining and beneficiation enterprise in
China. The company owns 3 fluorite concentrators and 6 mines in Luoyang,
Chongqing and other areas. With reserves of 3 million tonnes of fluorite, the
company can produce 60 thousand tonnes of flotation fluorite powders annually.
Fluorite
plays an indispensable role in the production of fluorine. At present, DFD
needs to purchase about 500 thousand tonnes of fluorite powders for the
chemical production of fluorine each year. Therefore, Luoyang Lanbao’s annual
capacity of fluorite powders will satisfy the needs of DFD.
DFD's market competition and economy of scale
to be enhanced significantly
According
to DFD, the company has a complete industrial chain of "fluorite - high purity
hydrofluoric acid - lithium fluoride/ aluminium fluoride - lithium hexafluorophosphate
- lithium batteries". The acquisition of Luoyang Lanbao will be beneficial to integrating
fluoride resources by increasing supplies of the chemical. In this way, the
company’s market competition and economies of scale will get enhanced to a
better degree. What’s more, with more guarantee of raw materials, the
industrial chain will be improved, which is a good promotion of the competition
of products and a consolidation of sustainable development of the company. In
other words, more supplies of fluoride will give a better support to the
high-end products of DFD, such as lithium hexafluorophosphate and electronic
hydrofluoric acid.
In terms of
the future, DFD expressed that the company will increase more inputs in Luoyang
Lanbao by transforming the technology and strengthening the research and
development. This will certainly further improve the production efficiency as
well as ensure sufficient supplies of fluoride in the future.
DFD is a top enterprise with the best sales
volume of lithium batteries in China
Founded in
1999, DFD is a Chinese high-tech enterprise with a focus on research and
development in chemical elements, including fluoride, lithium and silicon. The
four main products of the company consist of inorganic fluoride, electronic
chemicals that contain fluoride, lithium batteries and electric vehicles.
In the
field of fluoride industry, DFD created an own industrial chain with lithium hexafluorophosphate,
an essential raw material of lithium batteries. This achievement has made DFD a
top enterprise with the best sales volume in whole China. Its production of lithium
batteries has been developed into a large-scale production with the capacity of
300 million ampere hours.
For more
information about China’s fluoride market, please have a look at our monthly
newsletter China Fluoride Materials Monthly
Report.