Op­ti­mum moves into lithium-ion sec­tor

China Daily (USA) - - BUSINESS | MARKETS - By JING SHUIYU jing­shuiyu@chi­nadaily.com.cn

New en­ergy ve­hi­cles will be the com­pany’s strate­gic fo­cus. Based on this, we will ex­pand into var­i­ous re­lated busi­nesses in the fu­ture.”

Shaanxi J&R Op­ti­mum En­ergy Co Ltd is set­ting its sights be­yond its main busi­ness of mak­ing fire­fight­ing equip­ment, bet­ting that it can achieve strong earn­ings in the new-en­ergy ve­hi­cle in­dus­try.

The listed com­pany, which started as a fire­fight­ing equip­ment man­u­fac­turer, used ac­qui­si­tions to make in­roads into the lithium-ion au­to­mo­tive bat­tery and elec­tric ve­hi­cle in­dus­try.

It has ac­quired a 19.9 per­cent stake in Al­tura Min­ing Ltd, an Aus­tralian sup­plier of lithium raw ma­te­ri­als, for A$41.6 mil­lion ($30.69 mil­lion), the com­pany said.

“The com­pany did so to meet the grow­ing de­mand for lithium-ion bat­ter­ies. We be­lieve the ac­qui­si­tion of Al­tura will en­sure that we have a safe place in the up­stream part of the value chain,” the com­pany Chair­man GuoHong­bao said. Guo Hong­bao,

Al­tura will sup­ply Op­ti­mum 10 mil­lion met­ric tons to 15 mil­lion tons an­nu­ally of spo­dumene, a raw min­eral which is a source of lithi­u­mion bat­ter­ies.

In China, the out­put of lithium-ion au­to­mo­tive bat­ter­ies was 16.9 GWh in 2015, while the de­mand is pro­jected to reach 125 GWh in 2020, ac­cord­ing to data com­piled by Si­no­link Se­cu­ri­ties Co.

In ad­di­tion, the com­pany re­cently won a con­tract for 120 all-elec­tric bat­tery buses, worth 103 mil­lion yuan ($14.95 mil­lion), from Jinzhou Public Trans­porta­tion Corp, a bus com­pany in Liaon­ing prov­ince.

Li Yao, gen­eral man­ager of Op­ti­mum, said: “New en­ergy ve­hi­cles will be the com­pany’s strate­gic fo­cus. Based on this, we will ex­pand into var­i­ous re­lated busi­nesses in the fu­ture.”

In­dus­try data show there’s plenty of room for growth of the in­dus­try, espe­cially af­ter the govern­ment is­sued a plan for new en­ergy ve­hi­cles in 2012.

It pro­posed that the pro­duc­tion ca­pac­ity of bat­tery elec­tric ve­hi­cles and plug-in hy­brid cars should reach 2 mil­lion in 2020 and that the cu­mu­la­tive out­put and sales ex­ceed 5 mil­lion by then.

The out­put of elec­tric ve­hi­cles was 276,000 in the first 10 months of 2016, up 98.1 per­cent from the same pe­riod last year, while the sales more than dou­bled to 258,000, data from the China Association of Au­to­mo­bile Man­u­fac­tur­ers showed.

Qu Guochun, deputy di­rec­tor-gen­eral of the ma­chin­ery in­dus­try depart­ment at the Min­istry of In­dus­try and In­for­ma­tion Tech­nol­ogy, said in late Oc­to­ber that new en­ergy ve­hi­cles lead the way in au­to­mo­bile de­vel­op­ment, and the govern­ment has been mak­ing ef­forts to make mon­i­tor­ing sys­tems and im­prove sub­sidy poli­cies.

Ear­lier this year, Op­ti­mum bought to­tal own­er­ship of a do­mes­tic elec­tric ve­hi­cle man­u­fac­turer, sig­nal­ing the tran­si­tion to the newly emerg­ing field.

Op­ti­mum re­ported that, be­cause of the ac­qui­si­tion, its rev­enue ex­ceeded 1.15 bil­lion yuan in the first three quar­ters this year, triple that in the same pe­riod last year.

chair­man Shaanxi J&R Op­ti­mum En­ergy Co Ltd

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