Himadri Speciality Chemical Limited announced that Board of Directors of the Company at its' meeting held on 5 December 2023 has considered and approved setting up of the Manufacturing facility for the production of Lithium-ion Battery (LiB) components with total annual production capacity of 200,000 MT either directly and/or through its subsidiaries with an estimated project cost of INR 48,000 million in phases over a period of 5 to 6 years. This investment will be made largely from internal accruals and balance from debt. Phase I of the capacity expansion will be of 40,000 MTPA at an estimated cost of INR 11,250 million and to be operational in 27 to 36 months at Odisha.

The capex will be funded largely through internal accruals and balance from debt. At full utilization of 40,000 MT, the company expects to generate a revenue of ~4X the capex with a very strong profitability and returns profile. Cathode materials are critical components required in the production of Lithium-ion cells that constitute 50-55% of the cell cost, with LFP being one of the predominant materials used in the manufacturing of LiB Cells.

Cathode Material demand is expected to increase to 9.4 million tonnes annually by 2030 to meet the required global production of LiB cells.