China's Fulin Precision and SD Lomon to Collaborate on Establishing Joint Lithium Battery Material Production Facilities
In a significant move to bolster China's lithium battery supply chain, Fulin Precision and SD Lomon have announced plans to establish two joint venture lithium battery material plants in Sichuan province. The partnership, revealed in early July 2025, aims to increase production capacities in phosphate and phosphorus chemicals essential for lithium battery manufacturing.
The joint venture plants are currently in the setup phase, with construction and operational preparations underway. However, detailed progress milestones or completion timelines have not been disclosed publicly. This collaboration represents an early but concrete step towards expanding China's lithium battery supply chain infrastructure.
One of the plants will focus on producing high-density lithium iron phosphate, a material in high demand due to its suitability for manufacturing fast-charging batteries. Last year, Shenghua New Material, a parent company of Fulin Precision, reported sales of CNY4.8 billion (USD670 million) from high-density lithium iron phosphate. It's worth noting that these sales were not part of the joint venture plants mentioned in the announcement.
The other plant will produce lithium dihydrogen phosphate and ferrous oxalate. Fulin or its subsidiary will own 51% of the high-density lithium iron phosphate joint venture, with SD Lomon holding the remaining share.
In a related development, CATL, a major client of Fulin's lithium battery materials unit, has signed a deal with Fulin for priority production of lithium iron phosphate cathode materials from this year to 2029. This agreement will support Fulin's capacity expansion with advanced payments.
The annual output capacity for each of the three products produced by the plants is set at 100,000 tons. The partners have not disclosed the cost of the projects or their construction timelines.
Shares of both Fulin Precision and SD Lomon have been affected by this announcement. Fulin's share closed down 0.2 percent at CNY13.01 (USD1.82) each, while SD Lomon's share rose 1.2 percent to end at CNY11.43. The wider Shenzhen market also climbed 1.2 percent.
This development is expected to address the shortage of high-density lithium iron phosphate, a crucial component in the production of high-performance lithium batteries. The increased production capacity is likely to benefit companies like CATL, which rely heavily on these materials for their battery production.
The joint venture plants are currently in the process of setting up, focusing on producing high-density lithium iron phosphate, lithium dihydrogen phosphate, and ferrous oxalate. This expansion in technology is anticipated to alleviate the shortage of high-density lithium iron phosphate, a vital component in the production of high-performance lithium batteries, benefiting companies like CATL.
