On the evening of October 10th, Zhejiang Wynca Chemical Group Co.,Ltd. (hereinafter referred to as Wynca) unveiled its intention to acquire a controlling stake of 51% in Hubei Huang’enye New Material Technology Co., Ltd. (referred to as Huangenye hereafter) for a staggering sum of RMB 98.88 million. The target company specializes in production of graphitization and negative electrode materials, boasting an impressive 20 kt/a capacity of graphitization alongside an advanced artificial graphite whose output reaches 8,000 t/a.
For this acquisition, not only will it expand the scale of Wynca negative electrode materials, but more importantly, facilitate the company in achieving an integrated graphite production process and enable its negative electrode materials to penetrate into the top customer supply system.
Wynca stated in the announcement that this acquisition aims to revolutionize the current practice of outsourcing the crucial graphite chemical process of its negative electrode materials, and fulfill the demands of leading battery manufacturers in downstream sectors for a comprehensive negative electrode material enterprise process. Upon completion of the transaction, the acquired company will synergistically collaborate with its existing negative electrode material business in terms of market expansion, sales channels, customer resources, etc., facilitating integration of negative electrode materials into top-tier customer supply systems and bolstering its overall competitiveness within the new energy industry.
01 Graphitization capacity boosts the company’s entry into the leading lithium battery supplier to customers
The graphitization process plays a pivotal role in the artificial graphite processing, and its shortage of graphitization production capacity has had an impact on the delivery schedule of negative electrode materials and even lithium batteries. Consequently, downstream lithium battery customers are placing greater emphasis on the self-sufficiency of negative electrode material enterprises in graphitization and the comprehensiveness of their production processes when selecting suppliers.
Wynca has also acknowledged this and it has been strategically planning and meticulously executing the establishment of graphitization production capacity ever since venturing into the realm of graphite negative electrode materials. In January of this year, Wynca acquired a majority stake of 55% in Qiyuan Jincan Co., Ltd. During that time, the company explicitly stated in its announcement that Qiyuan Jincan will fortify its self-sufficiency in graphitization production through autonomous construction or collaborative efforts with existing market players. During the performance briefing held in May this year, Wynca declared that Huzhou Qiyuan Jincan, as its subsidiary, will newly erect a 100 kt capacity of negative electrode manufacturing, out of which the 50 kt are already underway during Phase I construction; furthermore, the company shall also provide corresponding graphitization production capacity.
The acquisition on Huang'enye is built upon the target company's existing 20 kt/a of graphitization capacity. Wynca anticipates achieving seamless integration in the production of graphite negative electrode materials, thereby meeting the comprehensive demands of top-tier battery manufacturers throughout the entire process. This strategic move will expedite our entry into the supply system for leading lithium batteries and maximize our contribution to performance through successful transformation into new energy materials business.
02 Wynca’s long-term negative production capacity will be more than 200 kt
The acquisition not only enhances production process of negative electrode materials of Wynca, but also further expands the company's capacity for producing negative electrodes.
According to the announcement, Huang'enye possesses an 8,000 t/a artificial graphite negative electrode production facility. With the addition of Qiyuan Jincan's existing 20 kt/a negative electrode production capacity, which was previously acquired by the company, Wynca will totally have a 28 kt capacity of negative electrode. In the long term, the planned negative electrode production capacity of Wynca may exceed 200 kt. As early as in 2022, Huang'enye invested in constructing a lithium battery negative electrode materials plant with an annual output of 100 kt and a carbon-carbon composite materials plant with an annual output of 4,000 tons, which will be completed in three phases. Currently, the first phase involving graphitization has been concluded and put into operation; furthermore, project construction will be expedited in the future.
03 New negative electrode capacity will be constructed of 100 kt
Additionally, during the performance briefing in May of this year, Wynca announced that Qiyuan Jincan would establish a new production capacity for negative electrodes, totaling 100 kt in addition to the existing 20 kt. The first phase of construction has already commenced with a capacity of 50 kt. With the continuous advancement and completion of various projects, Wynca's production capacity for negative electrode materials has expanded significantly, enhancing the competitiveness of itself.
In recent years, with the robust development of industries such as energy storage and new energy vehicles manufacturing, lithium batteries have exhibited a boom, thereby fueling an escalating market demand for negative electrode materials and intensifying the need for upstream material supply. Wynca is expediting its strategic deployment in the new energy sector and is poised to gradually emerge as a novel profit driver for the company.
