Sector News

Mitsubishi Chemical and Ube Industries to combine electrolyte business in China

October 13, 2016
Chemical Value Chain

Mitsubishi Chemical Corp. and Ube Industries announced today that they have agreed to join forces in the lithium-ion (Li-ion) battery electrolyte business in China.

The two companies have agreed to form a 50-50 joint venture (JV) combining their electrolyte operations to improve cost competitiveness. The JV is expected to begin operations in April 2017. In the meantime, the companies plan to apply for approvals from the Chinese government authorities and from other relevant countries, to comply with competition law.

The tie-up may lead to the two companies developing production capabilities in other countries and regions besides China. The companies currently have combined capacity to produce 58,500 metric tons/year of electrolytes. Mitsubishi manufactures electrolytes at Yokkaichi, Japan; Stockton-on-Tees, United Kingdom; Memphis, Tennessee; and Changshu, China. Production capacity of the plant in Japan is 13,500 metric tons/year and the other three facilities are each designed to produce 10,000 metric tons/year. Ube manufactures electrolytes at a 10,000-metric tons/year plant at Sakai, Japan, and a 5,000-metric tons/year facility at Zhangjiagang, China.

The Li-ion battery electrolyte business has been growing due to rapidly increasing demand from portable devices, including smartphones and tablets. Future growth is forecast to come from Li-ion batteries used in eco-vehicles, including hybrid vehicles, plug-in hybrid vehicles, and electric vehicles. Mitsubishi and Ube say that while demand has taken longer to develop than industry projections, actual demand is growing. Li-ion batteries will also find increasing use in applications such as energy storage systems and other industrial applications, they say.

The market for Li-ion batteries used in the automotive industry is growing rapidly in China, driven by government subsidies. This is driving growth for materials used in the batteries, including electrolytes. The competitive dynamic, meanwhile, is changing with new producers entering the market.

By Natasha Alperowicz

Source: Chemical Week

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