Himadri Chemicals Announces ₹4,800 Crore Investment in Lithium-Ion Facility
- ByStartupStory | December 6, 2023
Himadri Specialty Chemicals is set to make a significant investment of Rs 4,800 crore, marking its entry into the production of Lithium-ion battery components. The company’s forthcoming facility in Odisha will specifically focus on manufacturing Lithium Iron Phosphate (LFP) Cathode Active Material, a pivotal component for electric vehicle (EV) batteries. This strategic move positions Himadri as the pioneer in India’s foray into this sector.
Funding for the project will primarily stem from internal accruals, as stated by the company’s top officials. Anurag Choudhary, CMD & CEO of Himadri Specialty Chemicals Ltd, mentioned, “The company anticipates being debt-free and cash positive by March,” highlighting their aim to utilize internal resources. Choudhary also attributed the development of this product to the extensive efforts of their 150-member R&D team over nearly 15 years.
The project will roll out in phases, with the initial phase costing an estimated Rs 1,125 crore for a 40,000 MTPA capacity, expected to commence operations within 27 to 36 months. Over the next five to six years, Himadri envisions scaling up to produce 200,000 MTPA of LFP Cathode Active Material, catering to 100 GWh of Li-ion Battery, showcasing their ambitious growth trajectory.
Recognizing the pivotal role cathode materials play in Lithium-ion cell production, which significantly contributes to the cell cost, Himadri aims to tap into the rising demand. With the global Cathode Material demand expected to soar to 9.4 million tonnes annually by 2030, Himadri seeks to establish a strong foothold in this burgeoning market currently dominated by Chinese players.
However, Himadri’s focus remains on selling these materials to original equipment manufacturers (OEMs) and battery cell manufacturers, without venturing into Lithium-ion battery manufacturing themselves. The company’s outlook also includes exploring international markets, with plans to export their new product beyond India, anticipating substantial demand.
Lithium Iron Phosphate (LFP) batteries, favored for their higher thermal runaway temperature and enhanced safety compared to other battery types, hold a strategic advantage in varied climatic conditions like those in India. Their cost-effectiveness and longer lifespan further bolster their appeal, diverging from the higher production costs associated with other battery compositions.
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