On February 8, Jiayuan Technology announced that the company intends to jointly invest with Contemporary Amperex Technology Co., Limited (CATL) in Meixian District, Meizhou City to establish Guangdong Jiayuan Times New Energy Materials Co.
- Jiayuan Technology will contribute RMB 400 million（$63.07million）, accounting for 80% of the registered capital of Jiayuan Times; CATL will contribute RMB 100 million（$15.77million）, accounting for 20%.
After the establishment of the joint venture company, the two parties will rely on the joint venture company to build a 100,000-ton-per-year high-performance electrolytic copper foil project. According to the announcement, Jiayuan Technology and CATL will subsequently increase the capital of the joint venture company to a registered capital of RMB 2 billion （$315.34 million）based on the construction of the first phase of the project.
Why it matters
Copper foil companies are expanding capacity. Thanks to the large-scale capacity layout of power battery head enterprises, the demand for lithium copper foil has been climbing rapidly since the beginning of last year. The supply of copper foil is tight and price increases are beginning to appear. Based on the demand for lithium copper foil, copper foil companies have set off a tide of production expansion in 2021.
However, considering that copper foil is under the limitation of equipment, technology, capital and certification, lithium copper foil expansion cycle is long and the capacity gap is difficult to solve in the short term.
The copper foil gap will affect the battery production capacity.
Cooperation with copper foil companies can, on the one hand, guarantee the supply of raw materials and achieve rapid release of production capacity; On the other hand, it is also conducive to collaborative R&D and rapid import of copper foil products with 6μm or even smaller μm to achieve leadership in battery performance.
Our Take：
- CATL has over 600GWh of existing, under construction and planned production capacity and has a huge demand for copper foil. The establishment of a joint venture with Jiayuan Technology will help secure its copper foil supply.
- For Jiayuan Technology, the establishment of a joint venture with CATL will enable it to obtain financial support for rapid production expansion, as well as greatly shorten product verification and certification time due to the assurance of a major customer, and also enable it to quickly introduce new technology products such as 6μm and 4.5μm.
