Kureha to meet growing lithium-ion battery market demands

In recent decades, Japan has seen the rise of emerging manufacturers located in China, South Korea, and Taiwan who have replicated advanced Japanese technologies, products, and processes but done so at a lower cost, taking advantage of economies of scale to offer consumers lower priced products. Nevertheless, we still find that Japanese companies, both large and small, are able to maintain a very large market share in certain niche segments. For example, in the Advanced Materials and Plastics field, companies like PBI Advanced Materials and Mitsubishi Chemical have developed some of the most advanced technologies in the world. Why, in your opinion, have Japanese companies been able to remain competitive and niche leaders in the face of such stiff price competition?

First you must realize that situations are quite different for commodity chemicals and specialty chemicals. In the commodity chemicals market, cost competitiveness through economies of scale is certainly advantageous and is often a winning factor. And such an advantage will enable a new player to quickly dominate the market. Meanwhile, in the field of specialty chemicals, you often start by building trust with your customer, learning about their needs ahead of your competitors, and then develop products to address the unmet needs. Here, to satisfy your customer, what’s more important is your accumulated knowledge and technology, as well as your ability to analyze the performance of your product when integrated into a customer’s end products. Niche markets usually fall in this latter category.

Kureha is a specialty chemicals company. We have built a strong position in certain niche markets related to advanced materials and specialty plastics, where there are only a few suppliers for those materials. Our products are developed and tailored with necessary functions to meet individual customer needs. Thus, we differentiate our products by technology and by developing high-performing materials to answer customers demanding and changing needs.
 

Worldwide, we are seeing increasing interest in nanostructured functional materials with internal or external dimensions on the order of nanometers. Their particularly small dimensions make these materials unique and promising for clean energy applications such as lithium-ion batteries (LIBs). While you are now very focused on material supplying for LIBs, we understand that Kureha began as a chemical company in the 1940s before getting involved in plastics in the 80s. What advantages has your background in chemicals and plastics created for your LIB material business?

The history of our LIB materials business began with Sony almost four decades ago, when they came and requested joint research to explore the potential of our hard carbon as a LIB anode material for their LIB. They appreciated our technological expertise in carbon materials, which we had accumulated over years of experience in crude oil cracking. And our hard carbon was, after repeated improvement, adopted as an anode material for Sony’s and the world’s first LIB.

As we worked along with Sony and studied the LIB mechanism and material needs, we also identified among our specialty products another potential LIB material, polyvinylidene fluoride (PVDF).

Since then, we have withdrawn from the hard carbon business, but our PVDF binder business is still growing strong. Today our PVDF ranks as number one in market share in the LIB cathode binder segment.

Your polyvinylidene fluoride (PVDF) material provides an excellent balance of chemical resistance and moldability and is thus the perfect binder for lithium-ion batteries for the next generation of vehicles. We know that you recently announced your plan to expand production capabilities for PVDF in China and have plans to roll it out in Europe and the US. What are the advantages of PVDF over more conventional battery binder materials and how are you demonstrating its benefits to potential customers?

LIB technology has evolved as a reliable power source for electric devices and mobile phones and now also for electric vehicles. We are supporting the technology advancement and assisting LIB makers in the development of new products. In the automotive sector, for example, a desirable LIB has higher capacity and higher voltage and therefore requires materials supporting such high performance. And our PVDF has been improved for this purpose with enhanced adhesive and cohesive properties. This improvement enables us to reduce the amount of binder to use (less cost) and instead increase the amount of electrochemically active components in Li-ion cells, thus enabling higher battery capabilities. Among many binder materials, high adhesive binders like our PVDF are rare. We believe this is a reason why demand for our binder products is strong, and we can keep a high market share.

The increasing use of LIBs across the world is driven by electrification in the automotive field and certain electronic and industrial devices. However, with this increased demand a big global challenge is the recycling of this material; we still do not know how. There was a recent report attacking Tesla which claimed that removing lithium-ion batteries from a car does more damage to the environment than driving a diesel car. How can the functional materials industry help address this challenge and what role will Kureha play in it?

Both automobile and LIB manufacturers have been researching ways to recycle LIBs after use in vehicles, and one of them is to reuse them as storage batteries. To support this challenge, we material suppliers should provide materials that will stably perform in an extended period of time and prolong the life of such recycled LIBs. Concurrently, we are working to develop technologies to further recycle our LIB materials after they were used in storage batteries.

Structure of lithium-ion battery (sourced by Kureha Corporation)

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You are present in nine countries including the USA, France, Germany, China, Vietnam, Australia, The Netherlands, among others. Why did you choose those locations and what benefit does it bring your business to be present there?

Over the past years, Kureha has expanded its business globally by first setting up a sales office in a target market while exporting products from Japan. If we see steady demand, we then build a manufacturing facility close to the market, so that we can swiftly distribute our latest quality products. As a result, we now have a sales office and a manufacturing facility for packaging film in Europe, where primary film applications are meat and cheese; in China, the “World’s Factory,” we run manufacturing plants for LIB materials and carbon fiber products; and in the US, which is the world’s largest shale market, we have a PGA resin plant and a marketing team to promote PGA frac plugs that are used in the process of shale oil and gas exploration.

There are many benefits to having overseas operation bases, and most importantly, they allow us to better understand customer needs, possibly before our competitors, and we can leverage the local knowledge for our product development and differentiation. These bases are usually operated by locally hired staff, so they can smoothly connect with the market and customers without language and cultural barriers. They are an important ‘bridge’ between the market and our R&D as well as production.

According to experts, demand for LIBs is expected to boom worldwide on account of government regulations mandating that cars must be either EV or hybrid based. As a company that is globalised, present on four continents, what is your international strategy to take advantage of the growth in lithium-ion batteries?

To further penetrate in the expanding LIB market, we are increasing our production capabilities for PVDF binder. And our first step is, as we announced last July, a new 10,000-ton production facility in Changshu, China. When this facility starts operations in 2024, Kureha’s production capacity for PVDF binder, with all the facilities in Japan and China combined, will reach 21,000 tons per year. And if strong demand continues, we are prepared to increase production at the new Changshu facility up to 15,000 tons.

LIB manufacturing is currently dominated by South Korea, China and Japan, but we expect the US and European countries will build more battery plants from now on. So, our next step in capacity increase after China will likely focus on the US and Europe in line with our basic strategy of “producing near the market”. Along with our capacity increase, we also intend to enhance our sales network in the growing LIB market by establishing more sales offices around the world.

As Japanese companies expand internationally, we see that they often take advantage of local knowledge. As you look to further expand internationally, what strategy will you use to take advantage of local knowledge? Are you interested in Joint Ventures, M&As, overseas factories or the opening of more local sales offices?

A）An international partnership is important in terms of securing raw materials and establishing an effective sales network, and its importance will likely increase in future. And we are going to use any opportunity to grow our business going forward, and that means we are always open-minded about M&A or joint venture.
Meanwhile, many of our overseas subsidiaries now operate with high degree of autonomy, effectively managing localized business and manufacturing activities and supporting our global expansion. And we are planning to increase regional sales and marketing offices in key growth markets to further the expansion. We expect to see more autonomy at our regional operation bases, including strategy planning and execution, while the headquarters provide necessary resources.
In terms of research and development, our Central Research Center and Iwaki Factory in Japan will continue to lead in the development of new technologies and products, and outside Japan, we have small R&D facilities for selective products in the US and China. We are going to enhance these regional R&D functions and their joint work with Japan in order to speed up product development.