Aleees leveraged the power of ternary materials and LFP trends
Planning to expand production capacity to 60,000 tons per year in 2020, Aleees’s new plant in Guizhou is expected to become the world’s largest maker of LFP and ternary materials with their comprehensive production line.
Guizhou Guian New Area, the 8th National New Area in China, has introduced five major industries such as electronic information to build high-end equipment manufacturing and other professional high-tech industrial parks. Local governments that dish out extra subsidies and draw up preferential policies aimed at attracting enterprise like Foxconn and Qualcomm. Aleees aimed at huge business potential of electric vehicle sector in China and the new plant will be settled in Guian New District. This move is to seize the new business opportunities in ternary and lithium iron battery industry.
Aleees’ chairman Edward Chang pointed out that electric vehicles are rigid demand in the Chinese market. If the market penetration rate of U.S. automobile is 70%, the car ownership in China would possibly reach 900 million units. This figure shows that burning gasoline is never enough reach the demand in this market. Therefore China is aggressively pushing new energy vehicles and planning to outlaw the production and sale of petrol and diesel cars in 2040. At the same time, ChangAn Automobile in China has already announced that they will stop selling fuel vehicles in 2025.
Apart from dishing out extra subsidies and preferential policies, Chinese government is continuously strengthening the perimeter of electric vehicles. For greater charging convenience, they will expand free installation of charging stations. The future construction of new parking lots will also set aside for private charging stations. The conditions of low prices and convenience will encourage customers’ willingness to purchase.
Poverty in Guizhou has been reversed
According to a statistics conducted by Aleees in 2016, the top five electric vehicles sales countries are China, the United States, Norway, the United Kingdom and France. Compared to other countries, China's huge market demand also contribute the most critical core business in electric vehicles industry - batteries. China’s production share has accounted for 60% of the world in this industry. Edward said that Aleees’s layout planning in China is expected to become the world’s largest cathode material target by 2020 and well-prepared for the ban on the sale of petrol and diesel cars in 2040.
Guizhou people used to self-deprecating that their per capita income are much lower than those cities in coastal region. Geographical environment is the main reason why Guizhou is that poor. Mountainous conditions and desertification lead to poor traffic. However, Guizhou is currently building high-speed railways to make the traffic more convenient.
After a famous chilli sauce called “Lao Gan Ma” was manufactured in Guizhou several years ago, the predicament of poverty in Guizhou is gradually reversed. Coupled with the rarity of Maotai, Guizhou has become one of the fastest-growing regions in China. In particular, the Nineteenth Congress reorganized the “wine table culture”. The government had issued the “Prohibition Order” which further increased the share price of Kweichow Moutai, with a market value of RMB 700 billion.
According to the statistics in the first 3 quarters of 2017, the GDP growth rate of 14 provinces in China were slightly slower than that of the first half of the year, and 4 provinces remained the same as the first half of the year. Before that, Tibet, Chongqing and Guizhou were the provinces of China’s fastest-growing economy. And Chongqing and Guizhou still maintained a growth rate for more than 10% in the first three quarters, ranking the top three in the country.
With the approval of the establishment of a national-level new district by the State Council in January 2014, Guian New District is the 8th national new district in China. It focuses developing of five major sectors which are cultural tourism, major health and new medicine, high-end equipment manufacturing, electronic information, and new energy materials. These industries include the planning of electronic information industry parks, modern efficient agricultural parks, and special equipment industrial parks. The well-known enterprises currently stationed include Qualcomm, Foxconn, Microsoft, and China’s top 3 telecommunications companies, Guizhou Aleees, and Li Shen.
Aleees’s new joint venture plant in Guizhou was ground broken on October. It seizes for n a new business opportunities of Ternary and lithium iron battery materials. Edward pointed out that with the support of Guian New District and FDG Group, it will start volume production in 2018, with an annual production capacity of 15,000 tons, and will begin to contribute in Q4, 2018. The second phase, with an annual production capacity of 30,000 tons in 2019, will be profitable.
Aleees planned to expand annual production capacity to 60,000 tons by 2020. Guizhou Aleees is expected to become the world's first manufacturer of new energy battery materials with their comprehensive production line of LFP and ternary materials by that time. In 2023, it will reach 100,000 tons of production capacity, with a revenue scale of 15 billion RMB (about 68 billion Taiwan dollars). Guizhou Aleees would apply for IPO raise and is then expected to be the first listed company in the District.
Guizhou Aleees is located in the northern park of the high-end equipment manufacturing industry park with total area of 367 arces of land. Registeredcapital is 2.3 billion RMB (about 10.5 billion TWD). Aleees invests 22.5 million RMB and holds 9% of its shares. FDG Group accounts for 51%, and Guian New District Government accounts for 40%.
Aleees has signed a strategic procurement agreement with Lishen battery companies before the groundbreaking. Aleees will expand cooperation with Lishen and the services include lithium-iron and ternary materials special cooperation, cost transparency, quality control, research and development, and international patent protection.
Edward points out that the layout of Guizhou plant is based on the advantages of a quality database that has accumulated a decade of mass production at Taiwan plant. The introduction of automated intelligent equipment is to achieve the highest stability in the plant. This business model allows customers to understand our manufacturing structure.This business model not only allows customers to understand the costs, but also establishes mutual trust between each other and achieves profit sharing among us. It can achieve customized specifications by choosing the specified materials and is a win-win model that can share profits between our clients and their customers.
Supported by Ruentex Group chairman Smauel Yin
Aleees has nearly 200 global patents, which 98 are self-owned. This benefited sales in china and achieved cost reduction. At the same time, sales to overseas can also achieve the protection of patents.With the price advantage on annual production capacity of 60,000 tons per year, the performance is 10% to 48% more stable than its peers’ performance. It could also increase 20% of the customer's revenue, making it the most cost-effective product on the market.
Edward further stated that the spray process has been introduced in manufacturing of Aleees’s lithium battery and accumulated for more than 10,000 tons of manufacturing experience. The quality is relatively more stable than the precipitation. Later, Aleees inadvertently masters it and discovers that the spray method is the best process for ternary materials. Currently, no one has done that before in LFP industry because the industry generally use precipitation process only. This breakthrough technology makes Aleees to gain customers’ recognition. The main customers of Guizhou Aleees currently include Lishen Battery, ATL( a subsidiary of TDK Corporation of Japan), and Lithium Battery of CNAC. Edward then emphasized that the current market demand for energy vehicles is approximately 40 million in China and Aleees will become the world’s largest cathode material plant in 2020.
It is not a sudden success for Aleees in the past twelve years. Edward recalled this entrepreneurship and said that it was too difficult in the beginning. However, turning point has arrived this year. Edward said, "I always think that Today is hard, tomorrow will be worse, but the day after tomorrow will be sunshine. However, 99% of people would give up tomorrow and never see the sunshine. I have to find a way to survive and see it."
Therefore, from financing of house mortgage to winning back of Samual Yin’s investment, Aleees earns recognition from clients. Fromrenting a factory in Guishan to conducting R&D for three shifts a day, Edward was recognized for his unremitting efforts. Driven by his passion for making great batteries, Edward was attached great importance by several famous investors. One time Samuel Yin asked BYD that who is best supplier of lithium batteries. BYD answered “Aleees” and thus Alees had the investment of Ruentex Group. Edwards said, “ Investment is not important than client’s recognition.”