DFD plans to establish joint venture subsidiary of fluorochemicals 11-04-2019

In mid-October 2019, DFD announced that it planned to invest in and set up a joint fluorochemical subsidiary Henan Fuxing Industrial Co., Ltd (Henan Fuxing Industrial) with Huayuan Industrial Co., Ltd in Mianchi county (Huayuan Industrial).

According to the announcement, the registered capital of Henan Fuxing Industrial is RMB 100 million, with DFD and Huayuan industrial providing RMB 51 million and RMB 49 million respectively. The contributing investment of DFD and Huayuan Industrial account for 51% and 49% of the total registered capital respectively. Henan Fuxing Industrial will mainly produce Fluorine chemicals, research and develop the technology of solid wastes, conduct operations, as well as develop industrial investment. Huayuan Industrial was founded in 2012, with a registered capital of RMB 5 million. Huayuan Industrial mainly focuses on the research, development, and production of calcium aluminate powder, polyaluminum chloride, upscale and unshaped refractory materials, as well as bauxite. The announcement also mentioned that collaboration with Huayuan Industrial will help to further develop the fluorine chemical industry of DFD in the future.

DFD emerged as leader in fluoride industry in 2011

In 2011, DFD consolidated its position in the fluoride industry. In the same year, DFD successfully completed a project of producing 2000 tons of LiPF6 and the quality of these LiPF6 products set the standard for the international market. DFD earned RMB 41.11 million from this venture, causing beneficial economic and social effects.

The project of the annual production of 2000 tons of LiPF6, hydrofluoric acid and Battery Grade Lithium Fluoride was progressing steadily in 2011. By December 31, 2011, DFD company already registered 134 patents with 65 authorized patents and three patents for invention. DFD was titled as a technological innovation demonstration enterprise by both the Ministry of Industry and Information Technology of China and the Ministry of Finance of China, and the project of inorganic fluoride cleaner production was commended as a vital project for resource conservation and environmental protection in 2011 by the National Development and Reform Commission of China.

While DFD company in Kunming was conducting several foreign investment projects, DFD company in Shenzhen started operation. The development of fluorite resources in DFD company made outstanding progress. Several fluorite development projects carried out together with other domestic companies made steady progress as well.

DFD lost millions in alternative fuel vehicle investment

DFD, an inorganic fluoride chemical industry, was the first A-share listed company in China, with its main business in lithium batteries and associated materials. In 2015, Hebei Hongxing Automobile Manufacturing Co., Ltd (Hongxing Automobile) was acquired by DFD. In the same year, with the popularity of DFD in the lithium battery and LiPF6 market, the company’s shares rose steadily.

However, DFD was not content to remain at its current level of production. The company started to enter the alternative fuel vehicle market, attempting to create a whole new production line of alternative fuel vehicles from lithium battery. In September 2015, DFD invested RMB 3 billion to set up a new base for Hongxing Automobile with the local government in Xingtai County. In August 2016, DFD provided another RMB 200 million for Hongxing Automobile. Afterwards, DFD planned to invest RMB 5.15 billion for the project of the annual production of 300 thousand alternative fuel vehicles. However, there was still no breakthrough for Hongxing Automobile.

Some analysts indicated that logically speaking, DFD’s annual goal of producing 100 thousand vehicles in 2018 was hopeless. In 2016, Hongxing Automobile lost RMB 40 million. Even though the loss in 2017 was smaller than that in 2016, it was too early to determine if there would be a breakthrough in the area of alternative fuel vehicles.

For more information on China’s fluorochemical market, please check our China Fluoride Materials Monthly Report.

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