BASF is planning a cathode joint venture in China

BASF and Shanshan, a supplier of lithium-ion battery materials for electric vehicles, among others, have agreed to establish a joint venture with BASF as majority shareholder (BASF: 51 per cent; Shanshan: 49 per cent) to produce cathode materials and their precursors in China.

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The transaction is expected to close in late summer this year, subject to approval by the relevant authorities. The announcement does not specify the amount of investment in the joint venture or sales expectations.

BASF will gain access to the Chinese market for cathode materials and expand its global presence, according to the German chemical company. The products of the joint venture will be supplied to Chinese cell manufacturers.

Partner Shanshan will benefit from the German company’s global customer network in the automotive industry, strengthening its competitiveness in the Chinese market, BASF said. Details on the production sites of the planned joint venture are not disclosed, but BASF aims to increase its annual capacity for battery materials to 160 kilotons by 2022, but is already planning expansions beyond that.

Hunan Shanshan Energy operates four production sites for cathode materials and their precursors in Hunan and Ningxia with an annual capacity of 90 kilotons by 2022, where cathode materials and their precursors are manufactured.

“BASF has broad and long-standing collaboration with global automotive OEMs and powerful brand impact,” said Yonggang Zheng, chairman of Shanshan. “Through the partnership with BASF, Shanshan will further strengthen the competitiveness in the Chinese market and accelerate the integration into the global market by providing high-quality services and products to customers in China and around the world.”

The German partner is also full of praise. “By combining BASF’s and Shanshan’s expertise, we will accelerate the electrification transformation of the transportation industry,” says Markus Kamieth, member of the Board of Executive Directors of BASF SE. Peter Schuhmacher, head of BASF’s Catalysts division, adds: “Our combined innovation and technology expertise will provide our customers with incomparable competitiveness on innovation, customer proximity and cost.”

Update 01 September 2021

Following approval by all relevant authorities, BASF and Shanshan have established the announced joint venture for battery materials in China. BASF Shanshan Battery Materials will be majority-owned by BASF with 51 per cent.

In the announcement, the German group also gives further details on the production: as mentioned above, Shanshan will contribute its four sites in Hunan and Ningxia to the joint venture. BASF Shanshan Battery Materials will employ more than 1,600 people at the start. By connecting to Shanshan’s existing infrastructure, the joint venture “already has a strong position in the battery materials value chain, including raw materials, precursors for cathode materials, cathode materials and battery recycling,” BASF said.

The German group says it brings “strong technology and development capabilities, a global manufacturing presence and strategic partnerships for raw material supply” to the venture.

Update 15 June 2022

BASF is expanding production capacity as part of its Chinese joint venture for cathode materials established last year to meet fast-growing local and global demand from the electric car industry. This involves the plants in Changsha (Hunan province) and Shuizuishan (Ningxia province), according to the BASF release.

With the expansion project, BASF Shanshan Battery Materials (BSBM) will reach an annual capacity of 100,000 tonnes for cathode materials. The product portfolio includes nickel-cobalt-manganese oxide (NCM) cathode materials with high and very high nickel content for polycrystalline and single-crystalline cathode materials as well as manganese-rich NCM products. The commissioning of the new production lines will take place from the fourth quarter of 2022., (update), (update II)


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