Guangdong Tonze Electric Co. Ltd. announced on August 2 that it has signed an investment agreement with the government of Ruichang. Under the agreement, Tonze will set up a local base for the mass production of LiPF6 (lithium hexafluorophosphate), high-purity LiF (lithium fluoride), and other related chemical products. In terms of production capacity, the base will have 30,000 tons per year for LiPF6 and 6,000 tons per year for LiF. Tonze will be committing an initial investment of around RMB 3 billion. Ruichang is a county-level city in China’s Jiangxi Province.

According to Tonze’s announcement, the base will comprise production facilities, warehouses, multi-purpose buildings, and other related industrial facilities. The construction phase will take no more than 18 months. Once the base is operational and running at full capacity, it is projected to generate an annual revenue of around RMB 6 billion.

Tonze said this investment fits into its own development strategy and aligns with the demand trends in the wider new energy market. The additional production capacity will also strengthen the company’s overall capability in terms of future growth and meeting market demand. In sum, the base will contribute to the company’s long-term growth and improve its core competitiveness.

Tonze is a Chinese company that is involved in the production of LiPF6 and the production of small home appliances. Sales of LiPF6 account for more than 80% of its revenue, whereas sales of appliances account for less than 20%.

Earlier, Tonze’s wholly-owned subsidiary Jiangsu Xintai Material Technology Co. Ltd. formed a joint venture to set up a base for the production of LiPF6. According to the latest information from Tonze, that base has completed the construction phase and is now in the pilot production phase. The production capacity of Xintai’s joint venture is expected to reach 10,000 tons per year.

Regarding its plan for the future, Tonze said Xintai’s joint venture will ramp up production in order to ensure a stable flow of supply. At the same time, Tonze will continue to improve the quality of its products and bring the management of its various business operations to an even higher standard. The contribution from Xintai’s joint venture will have a positive effect on Tonze’s performance for its current fiscal year.

Tonze estimates that its net profit for the first half of the year has reached RMB 500-520 million, showing a year-on-year growth rate of 144-153.76%. The expansion of Xintai’s LiPF6 production has been the main growth driver.

This article is a translation of a Chinese article posted by TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain. Some Chinese names are transcribed into English using Hanyu Pinyin.