(Yicai) Aug. 21 -- Ningbo Ronbay New Energy Technology will spend CNY2.6 billion (USD362 million) to construct two battery materials factories in Chungju, South Korea in order to better meet demand from South Korean battery giants and to expand its footprint overseas.

One factory, costing CNY1.99 billion (USD273.2 million), will produce high-nickel ternary cathodes with an annual output of 40,000 tons, the Ningbo, southeastern Zhejiang province-based firm said yesterday. It will be built by Ronbay’s South Korean unit JAESE Energy.

The other plant, costing CNY642 million (USD87.9 million), will produce lithium ferromanganese phosphate cathodes with a yearly output of 20,000 tons. This project will be constructed by a Chinese unit based in South Korea, in which Ronbay owns a 68.2 percent stake.

Lithium ferromanganese phosphate cathodes boast greater energy density as well as better low-temperature performance, than the more commonly used cathode material lithium iron phosphate, Ronbay said. It will be the first large production facility of this cathode material built by a Chinese company overseas.

Ronbay plans to leverage the South Korean market to go global in Europe, North America and Japan, the firm said in its globalization strategy released on Aug. 9. The company is made up of both Chinese and South Korean management teams and so it is very familiar with the business culture and laws in South Korea.

By positioning itself in South Korea, Ronbay is able to bypass international trade barriers. South Korea enjoys zero tariffs on exports to Europe and the US, while Ronbay’s China-based plants are slapped with a 25 percent tariff on exports to the US and 6 percent to Europe, it said in its 2022 annual report.

As part of this strategy, Ronbay intends to focus on three types of cathode materials in the coming years, namely high-nickel ternary, lithium ferromanganese phosphate as well as sodium-ion cathodes. It will also promote its own battery, the M6P which mixes ternary and lithium ferromanganese phosphate cathode, in overseas markets, it added.

Ronbay is already producing 20,000 tons of high-nickel ternary cathodes and 6,000 tons of precursor materials a year in South Korea. Last month it said that it has been given the go-ahead by the Saemangeum Development and Investment Agency to hike its yearly production of ternary precursors and the supporting sulfate materials to 80,000 tons each.

Ronbay’s share price [SHA:688005] was trading down 2.3 percent at CNY50.84 (USD7) as of 11.30 a.m. China time today.

Editor: Kim Taylor