Chinese battery maker Tianneng considering foreign plant (updated)

Tianneng Power International

08/03/2018 11:05

* Tianneng targeting battery markets in South and Southeast
Asia
    * To decide this year on country for factory - chairman
    * Plans to boost capacity by 20 pct, sales by 20-30 pct in
2018 

 (Adds detail)
    By Tom Daly
    BEIJING, March 8 (Reuters) - Chinese battery maker Tianneng
Group is considering setting up a factory in South or Southeast
Asia to tap local demand, while expanding capacity in China by
20 percent this year because of the electric vehicle boom, its
chairman said on Thursday.
    Zhang Tianren told Reuters that Tianneng, which mostly makes
lead-acid batteries used in electric scooters and cars, was
considering Vietnam, Thailand, Malaysia, Pakistan and Bangladesh
as destinations for a plant with an annual processing capacity
of at least 100,000 tonnes.
    "These (countries) are all relatively good," Zhang, a
delegate from China's eastern Zhejiang province at the National
People's Congress in Beijing, said in an interview. "We might
want to go and have a look at several countries. If they have
good conditions, open a factory."
    A decision on which country to build in will be made this
year, he said.
    A lot of small and middle-sized Chinese battery companies
have already gone over to South or Southeast Asia because of the
4 percent consumption tax on lead-acid batteries in China,
according to Zhang. "It's very hard for a lot of companies to
bear. The pressure is very big," he said.
    The migration mirrors one in China's scrap copper sector,
where new restrictions on imports of solid waste and a need for
importers to prove they are end-users of the material have
prompted scrap firms to set up shop in South or Southeast Asia
instead.  urn:newsml:reuters.com:*:nL4N1P32SI
    But for Tianneng, which both uses refined lead and recycles
spent batteries to make its products in China, the move is also
about "going overseas" and "integrating international resources"
in line with Beijing's Belt and Road Initiative, Zhang said.
    "We have to evaluate the place, how many waste batteries
there are and develop capacity based on the amount of raw
materials in the market."
    Unlike the scrap copper firms, which aim to process material
in Southeast Asia into a form that will be accepted in China,
Tianneng plans to purchase and process raw material locally,
then manufacture and sell its products on the local market.
    Still, Zhang, who also chairs listed unit Tianneng Power
 0819.HK , remains bullish on battery demand in China, where the
company plans to raise its recycling capacity by around 20
percent this year to 600,000-700,000 tonnes.
    "Our target is 1 million," he added, without giving a time
frame for that level to be reached.
    Zhang said he expects Tianneng, which also makes lithium-ion
batteries, to maintain annual sales growth of 20-30 percent,
without disclosing the 2017 sales figure.  

 (Reporting by Tom Daly; Editing by Tom Hogue and David Evans)
 ((tom.daly@thomsonreuters.com; +86 10 6627 1023;))