In an effort to expand into the market for electric car batteries, Zhejiang Hailiang Co, the world's largest manufacturer of copper tubes and rods, wants to invest 5.9 billion yuan (US$850 million) in an Indonesian copper foil plant.
As per the firm, which is situated in Zhejiang Province in eastern China, the project will be created in two parts and finished in 2025 and 2027, respectively. Each will be capable of producing 50,000 tonnes of copper foil for lithium batteries annually.
The statement highlights Zhejiang Hailiang's efforts to diversify into new energy materials and penetrate markets in Southeast Asia, Europe, and the US as margins in its home market decline due to intense competition. Without going into further detail, it claimed that the new project would lower risks from prospective global trade barriers and reduce tariff and transportation expenses.
“The Indonesian project is a key step in the company’s global strategy in new energy materials,” and will benefit from the Zhejiang Hailiang’s experience in its cross-border tube business, it said. The company has 21 production bases across the globe, including the US, Vietnam, Thailand, Germany and Spain.
Leading lithium battery manufacturers in China are aggressively searching for production locations abroad to create a global supply chain to access western markets, the business claimed. Additionally, they want to collaborate with domestic producers of copper foil, such Zhejiang Hailiang, in establishing production facilities abroad.
In order to meet growing demand, Chinese producers of steel and aluminium are also expanding into Southeast Asian nations, despite declining domestic consumption and mounting environmental concerns in China.