In early Oct. 2016, there was a rumour
saying that Do-Fluoride Chemicals Co., Ltd. (Do-Fluoride)’s subsidiary, Hebei
Hongxing Automobile Manufacturing Co., Ltd. (Hebei Hongxing), had suspended the
production of alternative energy vehicle (AEV). For this, Do-Fluoride made a
statement, clarifying that Hebei Hongxing’s AEV project was not suspended, and
instead, it was under reconstructing and upgrading.
Source: Baidu
However, it was a fact that its AEVs had yet to be launched onto the market.
According to its announcement made in Aug. 2015 regarding AEV manufacturing,
Do-Fluoride intended to build a production capacity of 14,000 unit/a by 2016
and 30,000 unit/a by 2017. The progresses made were far behind those planned.
Since 2011 when it achieved mass production of lithium hexafluorophosphate
(LiPF6), Do-Fluoride has been firmly expanding its Li-ion battery materials
business, and has been extending into power Li-ion battery and AEV
manufacturing business, a move intended to construct a full supply chain and to
make more profits. In May 2015, it input USD23.88 million (RMB160 million) into
acquiring a 69.407% stake in Hebei Hongxing, a step into AEV manufacturing.
Thanks to the emerging concept of “alternative energy”, “Do-Fluoride” became a
hot stock on A-share market: share price increased from USD2.54 (RMB17) in
early 2015 to USD15.82 (RMB106) in May 2016.
However, impacted by its delay in launching AEV, the figure started falling
that month: by 15.79% over May to USD4.78 (RMB32) on 30 Sept.
It is undeniable that Do-Fluoride
underestimated the difficulties during AEV manufacturing.
Li Yunfeng, president of Do-Fluoride (Jiaozuo) New Energy Technology Co., Ltd.
and a son of Li Shijiang, president of Do-Fluoride, listed 2 reasons for the
slowdown in AEV manufacturing in Sept. 2016:
1. “Government subsidies for key electric logistics vehicle had not been
received completely. Without subsidies, the company is hard to make profits. So
it is not a good time for launch.”
2. “Auto manufacturing is comparatively complicated and the company is still accumulating
AEV technologies. Now we slow down the production and enlarge R&D.”
For instance, Do-Fluoride increased capital of USD29.85 million (RMB200
million) in Hebei Hongxing in Aug. 2016, for which its shareholding rose to
85.294%. “This is aimed at strengthening technological R&D,” stated an
official from Do-Fluoride.
Meanwhile, Do-Fluoride has already had its 300,000 set/a AEV power assembly
project start up.
Nonetheless, it is of small possibility that Do-Fluoride can build a production
capacity of 100,000 unit/a by 2018. In addition, huge input into AEV
manufacturing will also challenge the company regarding stability of capital
chain and capability of resource integration.
Probably this is also a reason why Do-Fluoride annulled the acquisitions of
Shanxi Huangcheng Xiangfu Yuhang Bus Co., Ltd. and Shanxi Huangcheng Xiangfu
Zhongdao Energy Co., Ltd.
This article comes from China Fluoride Materials Monthly Report 1610, CCM
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Tag: fluoride