Enchem to Boost Operating Rate by Scaling Up ESS Shipments in China and North America

Electrolyte Supply in China to Grow Over 70%
Preparing for Long-term Supply Contract with CATL
Expanding LFP Electrolyte Supply for North American ESS

On July 23, Enchem, a company specializing in electrolyte solutions, announced its plans to ramp up production and shipments, particularly targeting the energy storage system (ESS) markets in China and North America, in order to increase the operating rate of its existing production facilities. Rather than pursuing simple external growth, the company's business strategy is focused on translating revenue growth into improved profitability and operational cash flow.

With domestic materials companies facing increased financial burdens due to a decline in the battery sector resulting from stagnating global electric vehicle demand, Enchem is also working to enhance utilization at its existing global production bases, rather than expanding production capacity. The company believes that by raising the operating rate of its factories, it can reduce the burden of fixed costs, minimize new facility investments, and still grow revenue.

Exterior view of Enchem's Zhuangzhou factory in China. Enchem

In the Chinese market, results from expanded supply have been seen since last year. In 2025, Enchem's Chinese subsidiary is expected to supply approximately 38,000 tons of electrolyte solution, representing an increase of over 70% compared to the previous year. The company operates production facilities in Jozhang and Zhangjiagang, with a combined production capacity of 220,000 tons, and it plans to further increase operating rates by expanding its local battery customer base.

Currently, Enchem supplies electrolyte solutions to a total of 50 companies, including 20 major Chinese battery manufacturers. This year, it is expanding its supply channels through new customer certifications and sales activities. Notably, driven by strong growth in the ESS market, Enchem has secured numerous customers, and total ESS-directed electrolyte supply in China is expected to reach 63,000 tons this year. This supply is projected to account for 70% of the company’s sales in the Chinese market.

Its supply contract with CATL, the world's leading battery manufacturer, is also a core part of its business expansion in China. Enchem has signed a contract to supply a total of 350,000 tons of electrolyte solution over a five-year period through 2030 and has been conducting quality verification procedures for mass production of lithium iron phosphate (LFP) battery electrolyte at its Jozhang plant. The company aims to increase its supply volume in China to approximately 80,000 tons this year, more than doubling last year’s volume.

In North America, Enchem is diversifying its customer portfolio from primarily electric vehicle electrolyte solutions to those for ESS applications. With ESS demand rising on the back of increased investment in artificial intelligence data centers and power grids, there is growing demand for electrolyte solutions optimized for LFP batteries, which are subject to long-term, repeated charge and discharge cycles.

Enchem is responding to the expansion of ESS production by North American battery customers, leveraging its Georgia plant in the United States. The company has been chosen as the electrolyte supplier for LFP batteries on the ESS production lines being built by global battery manufacturers in North America and is undertaking process approvals and mass production preparations centered at its Georgia facility. Based on the production scale of these lines, supply volume is expected to be around 5,000 tons, with the actual amount to be determined by the operating rate and production schedule of customer lines.

Including this plan, the company aims to increase its North American ESS electrolyte shipments to over 8,000 tons this year.

Enchem is also implementing measures to stabilize its financial structure. It is considering several options, including borrowing from financial institutions, attracting new investors, utilizing existing assets, and raising funds through the capital markets. Specific details regarding scale and conditions will be publicly released in accordance with relevant regulations once finalized.

Establishing a local financing base for its U.S. subsidiary, Enchem America, is another mid- to long-term strategy. If the ongoing merger transaction with a U.S.-listed company is completed as planned, the U.S. subsidiary will be able to independently secure growth capital by leveraging local production facilities and its customer base.

An Enchem official stated, "We are not simply focused on increasing production and shipments for the sake of revenue growth, but on turning those gains into real improvements in profitability and cash flow. Through expanding our customer base in China, responding to North America's ESS market, and raising the operating rate of existing production facilities, we plan to gradually strengthen our financial foundation."

This content was produced with the assistance of AI translation services.