Asahi Kasei to Build Lithium-ion Battery Separator Facility in Canada

Asahi Kasei has announced plans to establish an integrated plant in Ontario, Canada, dedicated to the manufacturing of base film and coating for Hipore™ wet-process lithium-ion battery (LIB) separator. The company has entered into a preliminary agreement with Honda Motor Co., Ltd. (Honda) for potential joint investment in this plant. Additionally, Asahi Kasei Battery Separator Corp., set to be established in October 2024, will receive financial backing from the Development Bank of Japan Inc. (DBJ) through preferred share issuance. Moreover, support from both the federal government of Canada and the provincial government of Ontario is anticipated for this investment.

As part of its expansion strategy, Asahi Kasei is investing in a new integrated plant located in Ontario, Canada. This facility will focus on the manufacturing and coating of base film for Hipore™ lithium-ion battery separators, a key component in battery technology. The total investment for this venture is estimated to be around ¥180 billion, reflecting the company's commitment to innovation and sustainability. Once operational, the plant is expected to have an impressive production capacity of approximately 700 million square meters per year, in terms of coated film. Commercial operations are slated to begin in 2027, marking a significant milestone in Asahi Kasei's global presence and contribution to the advancement of clean energy solutions.

ES Materials Holdings Corp., the North American arm of the separator business, will provide the required funding for this investment to ES Materials Canada Corp., the Canadian separator business entity, and E-Materials Canada Corp., the local manufacturing company tasked with plant construction and operations.

In its medium-term management plan for fiscal 2024, Asahi Kasei identifies its Energy Storage business as one of the "10 Growth Gears" (GG10) crucial for future expansion under the theme "Be a Trailblazer." Central to this business is the Hipore™ wet-process LIB separator, which boasts over 40 years of technological evolution and has expanded its market presence beyond consumer electronics to include automotive applications. Responding to the growing demand for battery separators in North America, particularly for plug-in electric vehicles, and in alignment with governmental clean energy policies fostering the establishment of North American LIB supply chains, Asahi Kasei has decided to establish an LIB separator manufacturing plant in Ontario, Canada.

Asahi Kasei and Honda have entered into a preliminary agreement recognizing the necessity of building a robust supply chain to ensure a consistent provision of high-performance batteries for the expanding North American plug-in electric vehicle market. Discussions are underway for the potential establishment of a joint venture aimed at producing Hipore™ separators tailored for electric vehicle batteries manufactured by Honda and other automakers targeting the North American market.

“Manabu Ozawa, Managing Executive Officer at Honda, articulated the company's ambition for achieving carbon neutrality by aiming for all global sales to come from EVs and FCVs by 2040. “The separator plays a crucial role in enhancing the performance and longevity of batteries, vital components for EVs. We are thrilled to collaborate with Asahi Kasei, a company renowned for its advanced technology and extensive knowledge in separators. This partnership will enable us to develop highly competitive EVs capable of meeting the increasing demand in the North American market.”

“Over the medium term, the Hipore™ business is poised to be a significant driver of growth for Asahi Kasei,” remarked Hiroyoshi Matsuyama, Senior Executive Officer of the company. “It's crucial for us to seize market opportunities in North America. Teaming up with Honda, a key player with a strong presence in the North American automotive market and a proactive approach to electrifying its vehicle range, empowers us to make substantial strides in enhancing LIB performance. This partnership aligns with the anticipated expansion of the electric vehicle market and the ongoing energy transition in North America.”

As part of the initiative to build a manufacturing facility for Hipore™ separator in Canada, Asahi Kasei Battery Separator Corp. will secure ¥28 billion in funding by issuing preferred shares to DBJ. This investment aims to boost the competitiveness of the LIB separator business and enhance the supply capabilities of LIB components.

Asahi Kasei aims to scale production appropriately to match market growth while mitigating investment risks. It anticipates financial assistance from both the federal government of Canada and the provincial government of Ontario, facilitated by Invest Ontario, the investment attraction agency. This support is expected to align with the memorandum of understanding signed in September 2023 between Canada and Japan regarding battery supply chains.