IVL Seeks new Battery Partner as Capchem Deal Folds

21.04.2023 - Thailand’s Indorama Ventures (IVL) says it is “continuing to assess” plans to build and operate a plant for “world-class” lithium-ion battery solvents at one of its petrochemical facilities on the US Gulf Coast, but no longer with Capchem USA, subsidiary of China’s Shenzen-Capchem Technology.

Entering the market as a competitive new player would reinforce the company’s transition toward downstream specialty products and increase opportunities in attractive end-market applications, IVL said.

While acknowledging that that its plans to build such a plant together with Capchem have collapsed, the Bangkok-headquartered company said its Integrated Oxides & Derivatives (IOD) business segment is now exploring licensing opportunities with a range of technology partners to help speed up the development of the technology.

From its US base near Houston, Texas, Alistair Port, executive president of Indorama’s IOD segment, said the business “has a successful track record of working with technology license partners to benefit the high-growth North American market.”

Plans were unveiled in August 2022

Plans for the joint company were announced in August 2022.  In view of the trend to electric vehicles, a new plant on US soil would “significantly benefit” the North American lithium-ion battery market, which depends on imports from Asia, the companies said at the time.

The markets for both the vehicles and batteries are experiencing “significant growth they added, underscoring that Capchem USA’s Chinese parent is a global leader in the sector.

The plans were said to include an option to build a second module to meet the expected growth in demand.

Shenzhen Capchem Technology, which acquired BASF’s electrolyte business in Europe and the US in 2018, owns and operates a carbonate solvent facility in China. Indorama noted when announcing the link-up that the company has a mature production process.

Since buying the BASF business in 2018, the Chinese company has been on a global expansion course, in the same year founding both Capchem USA and a subsidiary in Poland with an eye to setting up its own production facilities in the two countries.

The Shenzen-based player’s portfolio is organized into lithium-ion battery chemicals, capacitor chemicals, organic fluorine chemicals and semiconductor chemicals, with the lithium-ion battery chemical business unit the company’s largest.

Deal collapse with geopolitical background?

Neither of the two companies commented on reasons for the break-up of the prospective partnership, amid speculation that it could have a geopolitical background.

According to press reports, US President Joe Biden aims to sign an executive order in the coming weeks that will limit investment in key parts of China’s economy by US-based businesses on national security grounds.

Sources speaking to the Bloomberg news agency said the administration, which has been debating the measure for almost two years, plans to take action around the time of the G7 summit scheduled to be held from May 19 in Japan.

Although the plans appear to be aimed at keeping US technology at home, some observers said it also seemed conceivable that Washington would be uncomfortable with Chinese technology being brought into a company based in the US.

Capchem already has joint ventures with leading lithium-ion battery companies in Europe and North America; however, existing business relationships apparently would not be affected.

Author: Dede Williams, Freelance Journalist