This Indian entrepreneur wants to break Chinese domination in key ingredient used in lithium batteries – Moneycontrol

The investment may seem small. A Rs 50-crore facility that will produce 5,000 tons of a niche raw material. But it can turn out to be the first of many steps towards making a presence in a market that is 80 percent dominated by Chinese companies.

Epsilon Carbon, which operates India’s first integrated carbon complex, commissioned its new facility on August 24 that will produce 5,000 tons of bulk meso, which is used to make graphite anode. The anode is a key constitute in Lithium Ion Batteries (LiB) that are used to power laptops, mobiles and electric vehicles.

Graphite anode is the single biggest material in a LiB cell, making up for a quarter of its volume. From making bulk meso, Epsilon will transit to the next step in the value chain –  manufacturing anodes.

“Historically, China has been supplying more than 80 percent of the global demand for graphite anode’s to the global LiB supply chain,” Managing Director Vikram Handa told Moneycontrol. He now wants to break that monopoly. Epsilon Carbon’s new unit, Epsilon Advanced Materials will house the new venture.

The venture, Handa says, will help make India self-reliant in graphite anodes active materials for manufacturing LiB batteries. “Whenever companies start making batteries in India, by then we will be prepared and would have got the approvals to supply anodes,” said Handa.

Handa’s company is investing Rs 500 crore in the next five years to increase its capacity to 50,000 tons per annum. While that will be just about 5 percent of the present global capacity, the facility will plug an important raw material requirement as India looks to push e-mobility, with emphasis on localisation.

While many auto companies have talked about setting up LiB manufacturing units in India, few have actually gone ahead. Most of them import batteries from China. Amara Raja Batteries Ltd, which makes traditional batteries, had in 2018 announced plans to set up a lithium-ion assembly plant.

Interest will increase, with EV sales in FY20 rising 20 percent to 1,56,000 units, even as demand for vehicles powered by conventional fuels nosedived. According to data by Society of Electric Vehicle Manufacturers (SMEV), 1,52,000 electric two-wheelers, 3,400 electric passenger vehicles (ePVs) and 600 electric buses were sold during 2019-20.

Handa is hoping to cater to this increasing demand that will lead to companies setting up units in India to manufacture batteries.

The two-year plan

At present, Epsilon will export all its production to China, South Korea and Japan. “Our approvals should come within three months,” said Handa.

Meanwhile, Handa will start the process to get approvals to supply anodes to some of the biggest LiB makers in the world. These include Samsung, Panasonic, LG and Chinese major CATL.

“We should get the approvals in place in two years, ” added Handa.

The entrepreneur, who founded Epsilon Carbon in 2010, is hoping to eat into the Chinese share by riding on the one advantage he has over them. “As we an integrated complex, which is situated in Bellary, in Karnataka, we have a backward integration from raw coal tar to the finished product.  This helps in keeping our carbon footprint 10 percent lower than global peers,” Handa said.

The integrated facility is situated inside the township of JSW Steel, which is chaired by Handa’s father-in-law Sajjan Jindal. The location helps Epsilon to source coal tar, the basic raw material, from the steel plant. Coal tar is a by-product from coke oven when coal is heated.

The location and the structure of the plant makes the whole process ‘continuous,’ explains Handa. Most of the Chinese facilities, on the other hand, make in ‘batches.’ Thus, says the entrepreneur, “the continues process is more efficient and cost effective.”

The company is also venturing into making carbon black, a key raw material for auto tires. The facility will be commissioned later this year.


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