Shida Shenghua invests in alternative fuel material project 10-31-2019

On October 13, Shida Shenghua announced a plan to cooperate with Sinochem Quanzhou in investing in the construction of a 440,000 t/a new energy material project in Quanzhou City, Fujian Province. According to Shida Shenghua, the project will be divided into two phases when it is implemented. Shida Shenghua will account for 55% of equity in the joint venture. The company believes that the investment will consolidate the company’s core position in the carbonate industry and that it will also accelerate business development in the company sector focused on lithium-ion battery materials.

In recent years, Shida Shenghua’s business in new chemical energy has rapidly developed. The main products of the company include carbonate products such as dimethyl-carbonate (DMC) and propylene carbonate, special electrolyte additives, as well as methyl tert-butyl ether (MTBE). In China, the company has become a major supplier that provides high quality raw solvent materials to manufacturers of lithium-ion battery electrolytes.

Shida Shenghua to fund new alternative fuel production facilities

According to the announcement, Shida Shenghua plans to invest in producing 440,000 tons of alternative fuel each year into the project for its joint venture with Sinochem Quanzhou, a total monetary investment of about USD 184.3 million (RMB 1.3 billion). The project is divided into two phases, and the company will first invest USD 112.5 million (RMB 794 million) into the construction of 120 thousand t/a worth of ethylene carbonate devices and 100 thousand t/a worth of DMC devices. The first phase is estimated to be completed by April 2021, with a 19 month construction period. The company will start the second phase, which will last for 12 months, depending on the market conditions.  A set of 120 thousand t/a worth of ethylene carbonate devices and a set of 100 thousand t/a worth of DMC devices are also included in the second phase project. It is predicted that Shida Shenghua will earn USD 315.5 million (RMB 2.226 billion) from this venture, with a net profit of USD 30 million (RMB 212 million).

Shida Shenghua said that developing lithium-ion battery electrolytes is becoming an essential part of the company’s main business. Based on the promising future of the alternative fuel vehicle industry, the alternative fuel material project will help the company obtain a market advantage in the carbonate business, and it will also increase the income of the company. It is a strategic development plan for the company.

Shida Shenghua undertakes lithium battery ventures in China and overseas

Some resources have reported that Shida Shenghua has been focusing more on the alternative fuel production line this year, with the growing development of the alternative fuel vehicle industry. The company continues to invest more resources in the business of lithium-ion battery electrolytes.

In March 2019, Shida Shenghua announced a plan to cooperate with PCC Rotika, a company in Poland. Under this plan, the companies aim to produce 20 thousand tons of ethylene carbonate per year for their project, and Shida Shenghua plans to use this opportunity to expand its market into Europe. In August, Shida Shenghua invested USD 79 million (RMB 560 million) in Dongying Harbor Economic Development Zone for the construction of a facility to produce 50 thousand t/a DMC. In the meantime, Shida Shenghua established a sole subsidiary in Kenli District, Dongying City, investing USD 23 million (RMB 160 million) into the construction of 5,000 t/a battery additive project.  

After the battery additive project, the DMC equity capacity of Shida Shenghua increased 1.5 times from a previous capacity 10,500 tons. And Shida Shenghua will become the first enterprise in China that provides five types of carbonate additives, lithium electrolyte salts as well as related additives. 

For more information about China’s Lithium battery market, please have a look at our monthly newsletter Li-ion battery China E-News.

Subscribe to our Newsletter


Next Press