BenQ Materials and Chery Group to Make Li-ion Battery Separator

BenQ Materials Corp. of Taiwan and Chery Group of China recently announced their setting up of a joint venture in China to produce materials for making separator films for lithium-ion batteries for mainly vehicles.

Capitalized at 80 million renminbi, the joint venture will make BenQ Materials a pioneer in Taiwan.

Industry sources say that the venture project indicates BenQ/AUO (AU Optronics) Group's aggressive business diversification.

Insiders say that BenQ Materials and a technology subsidiary of Chery Group, a major carmaker in China, will set up the 50-50 venture in Wuhu High-tech Development Zone, Wuhu, Anhui Province. The company will first install experimental production lines for R&D and then construct a factory in 2011 for mass production in 2012. Separator films produced by the new venture will be sold to the Chery Group and other customers worldwide.

Market insiders say that currently the core technologies of separator film products are controlled by mainly American and Japanese companies. The separator now accounts for 20% to 25% of an automotive lithium-ion power cell's overall cost, trailing only anode materials (35% to 40%). That means, they say, if the new venture succeeds in developing such material, the profit margin will be very lucrative.

Quoting other makers' data, BenQ Materials' chief financial officer S.H. Wang say that the profit margin of the separator film would be between 50% to 70%. Chery is now the sixth-largest (and the No. 1 independent) automaker in China, Wang says, so is expected to generate very strong demand for separator for the company's future electric-vehicle (EV) batteries.