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Dutch company to invest 12.8 billion yuan in China battery cell plant
Bloomberg | 2018/10/23

Dutch battery maker Lithium Werks is investing 1.6 billion euros (12.8 billion yuan) in a massive lithium ion cell factory in China to meet surging demand for batteries.

The factory will have production capacity of 8 gigawatt-hours per year, or the equivalent capacity of batteries to power 160,000 cars.

It will be the company's second Chinese manufacturing site and should start production in early 2021, Chairman Kees Koolen said.

The company will provide 20 percent of the cost in equity capital and raise the rest in project finance from a consortium of Chinese banks.

"We're in China again because it moves faster than others. It makes decisions quickly," Koolen said. "We're also in discussions with European governments but they're just doing a lot of talking."

Batteries will play a key role in the energy industry to complement the increasing share of intermittent renewable power, and in the auto industry as a cleaner alternative to gasoline and diesel engines prevalent in cars, buses and trucks across the world.

The deal is part of a broader partnership signed last week between the Netherlands and China.

Lithium Werks is focusing on making batteries for uses beyond electric vehicles, betting that everything from forklifts to boats and mining equipment will soon also run on electricity. Koolen expects revenue will reach $1 billion by 2020 and he plans to have 10 battery factories in operation by 2025.

The company was founded at the start of the year by combining startups with different competences along the battery manufacturing value chain. Deals include a division of cell maker A123 Systems, as well as Valence Technology and Super B, which both bundle cells into battery packs. Koolen expects to close two more deals before year end and several more in 2019.

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