On March 18th, SZXY Electronic Materials Technology Group issued an announcement that the company signed a strategic cooperation agreement with European power battery company Northvolt AB. Northvolt intends to regard SZXY as a preferred supplier of lithium battery separators, and SZXY intends to cooperate with Northvolt to establish a separator factory in Europe.
Both parties plan to carry out long-term strategic cooperation on the lithium-ion battery project. SZXY, in conjunction with Northvolt's capacity release plan, can supply lithium-ion battery separator supplies to Northvolt from the Changzhou plant and the European plant that may be built in the future. The total investment is expected to not exceed RMB 2 billion.
According to the plan, on the premise of the successful commissioning of Northvolt's Swedish and German plants in Europe, SZXY's European plant will begin supplying Northvolt in 2023. By 2024, the SZXY European plant will provide Northvolt with more than 50% of the required membrane including base film, coating and slitting.
According to the cooperation content:
(1) Mutually beneficial cooperation between the two parties, SZXY plans to build a lithium-ion battery separator factory in Europe to support the production of Northvolt lithium-ion batteries to expand the European market. Both parties will carry out extensive and in-depth cooperation in business and technology development to jointly explore the European market.
(2) If SZXY lithium ion battery separators meet Northvolt's supply requirements and specifications, quantity, commercial use, European localization, quality and sustainability, Northvolt intends to consider SZXY as a preferred supplier of lithium ion battery separators, and Purchase lithium ion battery separators provided by SZXY. SZXY intends to regard Northvolt as a priority customer in Europe, and assure Northvolt that priority will be given to lithium ion battery separators and services at preferential prices.
Prior to the completion of SZXY's European plant, Northvolt's early diaphragm demand will be supplied from SZXY's Changzhou base.
The main position of SZXY quality Changzhou base is the overseas market. The products supplied by the company to Northvolt this time are wet diaphragms. The European factory plans to designate Sweden.
Prior to this, SZXY has been taking the lead in the overseas market with dry process diaphragms. The realization of large-scale overseas supply of wet process diaphragms further highlights its dominant position in the field of wet process diaphragms.
Northvolt was founded in 2016 by senior executives from Tesla's former supply chain management department. Backed by international car companies such as Volkswagen, BMW, PSA and Renault, it almost bears the heavy responsibility for the rise of the European lithium battery market.
From the current capacity deployment perspective, Northvolt will invest 4 billion euros (approximately RMB 31.387 billion) to build a power battery plant. It is expected that the annual battery capacity will reach 32GWh by 2023.
SZXY is a dry diaphragm leader, wet diaphragm is accelerating growth. In 2019, SZXY dry process diaphragm shipments were approximately 210 million square meters, with a market share of approximately 28%, ranking first. Wet process diaphragm shipments were approximately 160 million square meters, and market share was approximately 8%. The market share named SHEJ is 55%, and the shipment of SZXY wet process membranes is accelerating, and its share is expected to continue to increase in the future.
SZXY said that the company's strategic cooperation with Northvolt this time will further highlight the company's dominant position in the field of lithium-ion battery separators and bring a positive role for the company's further promotion of separator products in the domestic and foreign markets; Their respective advantages will create greater business value for the cooperation between the two parties; in addition, this cooperation will further accelerate the company's development in the European market and lay a good foundation for the company to cooperate with well-known European car companies.
In fact, as the first Chinese company to realize the supply of diaphragms in overseas markets, SZXY has been the exclusive global supplier of LG Chemical dry process diaphragms since 2013. SZXY's wet process membranes have also been certified by LG Chem projects.
At present, SZXY's overseas business accounts for more than 50%. At the same time, overseas customers SZXY to Samsung SDI, Panasonic, AESC and other related products to send samples for testing, certification, import and other work is progressing as planned.
It is worth mentioning that, compared to the low-end diaphragm market with fierce price competition, SZXY's target market is the mid-to-high-end market. In addition to the domestic supply of first-line customers, the company will continue to explore overseas markets as one of its main development strategies. The Changzhou base will also undertake the important task of supplying overseas markets.
It is foreseeable that the next step SZXY will use the Changzhou base and the European base as the starting point to accelerate the globalization strategy.