Midland New Materials purchased separator production equipment for RMB 260 million!

On June 7, 2021, Midland New Materials (300586) announced that the company's holding subsidiary Meixin New Materials recently signed 4 sales contracts with Shibaura Machinery Co., Ltd., with the total contract price equivalent to 260 million yuan. The production equipment promotes the company's power lithium battery wet separator industrialization construction project.

In March this year, Midland New Materials announced that it would set up a subsidiary, Meixin New Materials, in Tongling Economic and Technological Development Zone, and planned to invest 2 billion yuan to build a lithium battery wet separator project with an annual output of 900 million square meters. The project will be constructed in two phases.

The production capacity of the first phase of the project is planned to be 414 million square meters of lithium battery wet separators, with a total planned investment of 870 million yuan, which will be implemented in two phases. In the first phase, it is planned to build 4 imported separator production lines with a production capacity of 204 million square meters and start production in 2022; in the second phase, it is planned to build 2 wide-width imported separator production lines with a production capacity of 210 million square meters.

The production capacity of the second phase of the project is planned to be approximately 500 million square meters of lithium battery wet separators, and construction is expected to start around 2024.

Meilian New Materials was established in 2000. It is mainly engaged in the research and development, production, sales and technical services of polymer composite coloring materials, providing customers with integrated solutions for plastic coloring. Its main products include white masterbatch with PE and PP as the matrix, Black masterbatch, color masterbatch, functional masterbatch and functional new materials, etc.

The purchase of equipment imported from Japan means that the first phase of Midland New Materials' project has entered the construction stage, laying the foundation for its cross-border layout in the lithium battery separator market.

It is worth noting that this is not the first time that Midland New Materials has deployed a lithium battery separator project.

On October 20, 2017, Midland New Materials announced that the company planned to establish a wholly-owned subsidiary, Guangdong Midland Separator Co., Ltd., with an investment of 50 million yuan, and use the subsidiary as the main body of the project to invest in and build a wetland with an annual output of nearly 100 million square meters. French separator base film and 80 million square meters of power lithium battery wet separator industrial construction project with coated separator. The total planned investment of the project is 503 million yuan.

However, in view of the fact that the company plans to invest in the establishment of a holding subsidiary Meixin New Materials in the national Tongling Economic and Technological Development Zone and change the implementation entity of the power lithium battery wet separator industrialization construction project from Guangdong Meilian to the holding subsidiary, and Guangdong Since its establishment, Meilian has not yet carried out substantial business operations. The company plans to dissolve and cancel it after Guangdong Meilian has completed the handover and handling of matters related to the project.

This means that the lithium battery separator project built by Midland New Materials in 2017 has not made substantial progress, and the company has not yet formed a large-scale separator production capacity and customer base.

Currently, driven by the overall blooming demand in multiple market segments such as new energy vehicles, energy storage, two-wheeled vehicles, and power tools, the demand for lithium battery separators is growing.

In order to further meet market demand and enhance competitiveness, head diaphragm companies including Enjie, Xingyuan Materials, Cangzhou Mingzhu, Sinoma Technology and other leading diaphragm companies are currently expanding diaphragm production capacity on a large scale.

However, with the large-scale expansion of production capacity, the contradiction between domestic high-end diaphragm production capacity insufficient and low-end overcapacity has become increasingly prominent. Under the pressure of intensifying market competition, diaphragm companies that do not have competitive advantages in production capacity, technology, quality, capital, etc. may be eliminated.

Since the lithium battery wet separator industry has high technical barriers, complex product production processes, and long equipment construction and debugging times, it requires high R&D capabilities of enterprises. Under this situation, Midland New Materials' large-scale construction of wet separator projects will also face tremendous pressure and challenges in future market competition.