FPG to Make Li-ion Battery Electrolyte for Vertical Integration

The Formosa Plastic Group (FPG), a leading petrol-chemical conglomerate in Taiwan, reportedly is planning to produce electrolyte for lithium-ion batteries, making it the first vertically integrated maker of lithium-ion batteries on the island, according to Chinese-language economic daily newspaper Economic Daily News (EDN).

The FPG has set up the Formosa Energy & Material Technology Co., Ltd. (FEMTC), an anode-material manufacturing joint venture with local Changes Ascending Enterprise Co., Ltd., and its affiliate Nan Ya Printed Circuit Board Corp., a major printed circuit board (PCB) manufacturer in Taiwan, has been evaluating to expand its investment in lithium-ion cells.

Market insiders said that FPG is expected to utilize its petrol-chemical plant in Jenwu, southern Taiwan, to produce the electrolyte. Scheduled mass-production date is about June 2010, when FPG is expected to become the first electrolyte supplier in Taiwan and a new counterpart with Japanese rivals such as Stella Chemical, Kanto Denka, Morita Chemical etc.

The electrolyte accounts for about 15% of a lithium-ion battery's total cost, compared to 26% of the anode material and 23% of the isolation film. Industry sources said that the electrolyte is a chemical material, which would cost FPG not too much investment for production of the new product.

Many market observers said FPG has been aggressively developing lithium-ion power-cell deployments, adding that anode and electrolyte already account for about 40% of the cost of a lithium-ion battery, so FPG will likely sharpen its edge with further vertical integration.