[Organic Chemicals] Concept breakdown: the electrolyte "solvent chain" (Part 1)
Jining Shida Shenghua New Materials Company has 50,000 tons of industrial-grade DMC capacity, mostly for its own use. It cooperates with Yankuang Guohong, leasing the latter's carbonate plant, which has the methanol and carbon dioxide feedstock needed to make carbonates, while New Materials handles day-to-day operations and management. Under their profit-sharing agreement, from January 1, 2018, 60% of the annual net profit from the cooperative assets goes to New Materials and 40% to Yankuang Guohong; the lease cooperation expires on December 31, 2020.
Dongying Zhongshida Industry and Trade Company mainly uses ethylene oxide, carbon dioxide, and CAT-1 as raw materials to produce battery-grade ethylene carbonate through catalytic synthesis, thin-film evaporation, and refining, with low-concentration ethylene carbonate as a byproduct. It currently has about 46,000 tons of capacity and is the company's main ethylene carbonate production unit.
Dongying Shida Shenghua New Material Company, 55.4% owned by Shida Shenghua, has 60,000 tons of solvent capacity, including battery-grade EMC and DEC. It also previously planned a 20,000-ton sodium methoxide project and is the main production base for downstream battery-grade solvent products.
Shida Shenghua (Quanzhou) Company, 55% owned by Shida Shenghua and 45% by Sinochem Quanzhou, is Shida Shenghua's second most important base outside Shandong. Its long-term plan includes 440,000 tons of solvent materials, including Phase I and Phase II projects of 120,000 tons of ethylene carbonate and 100,000 tons of dimethyl carbonate each; Phase I is scheduled to be completed and put into operation in November 2021.
Dongying Shida Shenghua Rongchuang New Materials Company plans a 5,000-ton electrolyte additive project. Phase I includes 200 tons of lithium difluorophosphate, 100 tons of lithium tetrafluoroborate, 100 tons of lithium difluorooxalatoborate, 20 tons of ethylene sulfate, 100 tons of lithium bis(oxalato)borate, 300 tons of lithium fluoride, and 600 tons of fluorobenzene. Lithium fluoride and fluorobenzene have started trial production, while production lines for the other products are still being prepared.
Dongying Shida Shenghua Chuanshi New Materials Company, a subsidiary of Shida Shenghua, focuses on silicon-carbon anode material projects. It currently plans 4,000 tons of silicon-carbon anode capacity: 600 tons in Phase I, 1,400 tons in Phase II, and 2,000 tons in Phase III. It is also building a new 1,000-ton/year silicon-carbon anode material production facility, expected to take 5 months to construct and to go into operation in Q4 2021.
Through this, the company has become a top supplier of the three major electrolyte raw materials: solvents, lithium salts, and additives.
Based on this, the Ruiyan Zhilian R&D Center estimates: with 2020 total revenue of 4.475 billion yuan, carbonate series products (including dimethyl carbonate, propylene carbonate, ethyl methyl carbonate, diethyl carbonate, and ethylene carbonate) brought in 2.3 billion yuan, with a gross margin of 32.59% and sales of 459,600 tons.
The company's new capacity includes a 3,000-ton lithium hexafluorophosphate project, a 20,000-ton sodium methoxide project, a 120,000-ton ethylene carbonate and 100,000-ton dimethyl carbonate project, a 5,000-ton electrolyte additive project, 1,000 tons/year of silicon-carbon anode material, 50,000 tons/year of ethyl methyl carbonate capacity, a 25,000 tons/year dimethyl carbonate unit, and a new 50,000 tons/year ethyl methyl carbonate/diethyl carbonate unit. Calculated at Q3 2021 prices, this represents 5.237 billion yuan in revenue—equivalent to rebuilding 117.8% of Shida Shenghua on top of its 2020 revenue, and all within about two to three years.
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