In the cold winter season, several local residents are carefully reading a new notice in front of the project bulletin board in Laizhou, Shandong. The document titled 'Consultation on Social Stability Risks of Wanhua Chemical Laizhou Annual Production 650000 Tons of Lithium Iron Phosphate Project' means that a new energy project with huge investment is one step closer to the official start of construction. For chemical giant Wanhua Chemical, this is not only another large-scale production base it has laid out nationwide, but also carries the hope of finding new growth engines in the industry cycle trough.

Wanhua Chemical's Lithium Battery Ambition

The 650000 ton lithium iron phosphate project launched in Laizhou this time is another heavyweight investment by Wanhua Chemical in the field of battery materials. The project covers an area of approximately 360000 square meters and will construct a large-scale lithium iron phosphate plant and related supporting facilities. This is not Wanhua Chemical's first foray into lithium circuits, but a crucial part of its vast layout.

Looking back at its development history, Wanhua Chemical has been planning for battery materials for over ten years. This globally operated chemical new materials company, founded in 1978, regards the battery materials business as a strategic direction of achieving a hundred billion level goal of "creating a new millennium". Since the establishment of a specialized battery material technology company in 2014, Wanhua Chemical has gradually connected multiple key links from lithium iron phosphate and ternary materials to negative electrode materials, electrolytes, etc. through various methods such as independent construction, acquisition, and joint ventures. As of now, its planned total production capacity in the field of lithium iron phosphate cathode materials has reached an astonishing 1.3 million tons.

1.3 million tons of production capacity in China's East West region

Wanhua Chemical's 1.3 million ton lithium iron phosphate production capacity plan is mainly distributed in the two major regions of Shandong and Sichuan, forming a clear production capacity map.

In Meishan, Sichuan, Wanhua Chemical's first independently invested and constructed "50000 tons per year lithium iron phosphate battery cathode material project" has started construction in 2022. At present, the company is promoting the "120000 ton per year iron phosphate expansion project" and transforming some of the existing ternary material production lines into lithium iron phosphate production lines, demonstrating a focus and adjustment trend.

In Shandong, the layout is even more grand. The "New Generation Battery Materials Industrial Park" located in Haiyang has a total investment of 16.8 billion yuan, with plans to construct 500000 tons/year of lithium iron phosphate and 300000 tons/year of artificial graphite negative electrode materials. The first phase of the 100000 ton lithium iron phosphate production capacity is scheduled to be put into operation in mid-2026. The newly announced Laizhou project, with an annual production capacity of up to 650000 tons, will undoubtedly become the core pillar of its production capacity layout in Shandong and even across the country.

If all the planned production capacity of 1.3 million tons is implemented, its scale will account for nearly a quarter of China's nominal total production capacity of lithium iron phosphate by 2025.

Can the second curve drive a rebound in performance?

For Wanhua Chemical, investing heavily in battery materials has a deep consideration of addressing the challenges of its main business and finding new growth drivers. Liao Zengtai, Chairman of Wanhua Chemical, once positioned the battery materials business as a "true second entrepreneurship" and admitted to feeling the ceiling of traditional business growth.

The performance data reflects this challenge. In 2024, although the company's operating revenue slightly increased by 3.83% to 182.069 billion yuan, its net profit decreased by 22.49% year-on-year to 13.033 billion yuan, hitting a new low in nearly four years. Since the end of the high prosperity cycle in the industry in 2021, the company has repeatedly experienced situations of "increasing revenue without increasing profits". The global chemical industry is considered to have entered a long bottom cycle, with overcapacity and intensified homogeneous competition, putting pressure on the growth of traditional businesses. At the same time, the extensive layout of battery materials is still in the construction phase and has not yet formed a significant profit contribution.

Analysts point out that the downturn in the global petrochemical industry may continue for several years. Therefore, accelerating the production and revenue generation of lithium battery materials business has become a strategic priority for Wanhua Chemical. The company is committed to building a complete industry chain from phosphate ore, lithium carbonate to positive electrode materials, and synchronously promoting technology research and development and production capacity construction in the fields of negative electrode materials, key binder materials PVDF, etc. Keywords: Battery News, Battery

According to the plan, Wanhua Chemical will continue to accelerate the construction of a series of battery material projects, including lithium iron phosphate, by 2025. The market is waiting to see whether this highly anticipated 'second growth curve' can help this chemical leader overcome industry downturns and achieve its long-term goal of 'creating a new millennium'. Editor/Yang Beihua