[SMM Sodium Battery Analysis] Introduction to Site Selection for Sodium Battery Enterprises:

SMM, December 20 -

Shuifu City Information (SMM)

Introduction: With the rapid development of the sodium battery industry, enterprises are actively planning the location of large-scale production lines. Considering cost-effectiveness and long-term development, areas with abundant raw material resources, dense industrial clusters, sufficient talent reserves, and favorable policies have become the top choices. Next, we will introduce the unique advantages of Yunnan Shuifu Economic Development Zone in the sodium battery and other new energy fields.

I. Overview and Regional Planning of Shuifu Economic Development Zone

The Yunnan Shuifu Economic and Technological Development Zone originated from the Yunnan Shuifu Industrial Park established in 2006. It was included in the "National Development Zone Announcement Directory" in 2018 and was approved as a provincial-level economic development zone by the Yunnan Provincial Government in March 2021.

Shuifu hosts a provincial-level economic development zone—the Yunnan Shuifu Economic and Technological Development Zone. The planned jurisdiction area covers 7.44 km², with a built-up area of 4.32 km². It is based on port logistics and green energy, led by new energy battery materials, supported by advanced equipment manufacturing, new materials, recycling and comprehensive utilisation of renewable resources, and complemented by modern service industries for all-round coordinated development. From January to September 2024, the total industrial output value reached 7.15 billion yuan, up 10.9% YoY. Currently, 41 enterprises are included in the development zone's statistical monitoring (including 19 industrial enterprises above designated size and 10 wholesale, retail, accommodation, and catering enterprises above designated size), providing employment for over 4,000 people. Within the cluster, there is 1 national-level "Little Giant" enterprise specializing in niche markets (Zhongsheng), 2 specialized and innovative small and medium-sized enterprises (Lithium Chen and Yuntian Morui), 3 national-level high-tech enterprises (Yuntianhua, Zhongsheng, and Lishi), and 9 provincial-level technology-based enterprises. In 2023, Yunnan Lithium Chen and Yuntian Morui both won first prize in the Yunnan Provincial Innovation and Entrepreneurship Competition and were listed among the top 500 in the 8th "Maker in China" SME Innovation and Entrepreneurship Competition. According to incomplete statistics, SMEs within the Shuifu Economic Development Zone cluster hold a total of 107 patents, including 32 valid invention patents, 74 utility model patents, and 1 design patent. The Innovation and Entrepreneurship Incubation Park is planned to be constructed in two phases, with a total area of 12,000 m² (the second phase is yet to be built).

Planning Goals: To establish a pioneering demonstration zone for Yunnan's integration into the Yangtze River Economic Belt, a new materials industry cluster in north-east Yunnan, and a pilot zone for port-park-city integrated development. Industrial Positioning: Based on port logistics, green energy, and natural gas chemicals, with fine chemical new materials as the leading industry, supported by new energy materials, advanced equipment manufacturing, and food processing, complemented by the development of modern service industries.

II. Introduction to Recommended Project Site

(1) Weiqiangba Plot

The Loubaba area has a planned area of 1.58 km². The Weiqiangba plot has basically completed the "six connections and one leveling." The plot has convenient transportation, being 300 meters in a straight line (approximately 600 meters by route) from the Loubaba toll station of the G85 Yinkun Expressway. The G247 National Highway passes along the edge of the plot. The plot is about 10 km from Shuifu Port and 9 km from Shuifu Railway Station. The surrounding infrastructure is well-developed, with the Loubaba gas distribution station, substation, and water supply plant all within 1 km.

Projects Already Established: An intelligent production line for lithium-ion battery materials and high-end equipment manufacturing; an annual production project of 5,000 mt of silicon oxide anode material; an annual production project of 600,000 m² of high-performance graphene thermal conductive film; an annual production project of 20,000 mt of natural graphite anode material; an annual production project of 50,000 mt of LFP cathode active material; and an annual production project of 5 GWh lithium-ion battery production base.

Among them, the Weiqiangba plot (L3) has a site elevation of 352.5, an area of 134,254.54 m² (201.38 mu), a length of 585.81 m, a width of 269.91 m, and a net usable area of 118,131.54 m² (177.20 mu); the Weiqiangba plot (L2) has a site elevation of 349, an area of 24,467.61 m² (36.07 mu), a length of 129.47 m, a width of 71.97 m, and a net usable area of 9,667.22 m² (14.5 mu).

(II) Zhangtanba Plot

The Zhangtan area is located alongside the G85 Yinkun Expressway and G247 Road, with a planned area of approximately 2,760 mu and about 440 mu of reserved land currently under acquisition. There is no permanent basic farmland, and the land is of a gentle slope type, located 4 km from Loudaba Town and 19 km from Shuifu City.

Projects Already Landed: An integrated project for the annual production of 100,000 mt of lithium-ion battery anode material; an annual production project of 30,000 mt of lithium-ion battery anode material pre-carbonisation; an annual production project of 50,000 mt of artificial graphite processing for lithium batteries.

Remaining Land Space: 697.39 mu, including 300 mu in contiguous plots.

    Among them, the Zhangtanba (T7) plot has a site elevation of 452, an area of 114,820.68 m² (172.23 mu), a length of 360 m, a width of 223.39 m, and a net usable area of 79,778.59 m² (119.67 mu).

(III) Shangquan Area

The Shangquan Chemical Zone in Shuifu Economic Development Zone has a planned area of 1,990.8 mu (1.32 km²), with a planned industrial land area of 1,583.55 mu. This area is currently undeveloped, with 125.32 mu of land approval completed and 1,332 mu of land under approval. As a reserved chemical park in the development zone plan, it serves as the foundation for undertaking chemical-related projects in the new energy battery materials industry. Currently, the application for the chemical park is underway.

III. Introduction of Peer Enterprises in the Region

Sichuan Times New Energy Technology Co., Ltd.

Sichuan Times is a wholly-owned subsidiary of CATL, located in Shaping Town, Sanjiang New District, Yibin.

In December 2019, CATL headquarters invested 10 billion yuan to launch the construction of the first and second phases of the Sichuan Times Yibin power battery project. In December 2020, it announced an additional investment of 10 billion yuan to expand the Yibin power battery project. In February 2021, it announced an investment of 12 billion yuan to construct the fifth and sixth phases of the project. The total investment exceeds 30 billion yuan, covering an area of approximately 3,500 mu, and it will become the world's largest lithium battery production site. The first phase of the project was officially put into operation on June 17, 2021.

Shuifu City is locally equipped with 5 GWh of lithium-ion batteries, 185,000 mt of anode materials, 50,000 mt of LFP cathode material, 600,000 m² of high-performance graphene thermal conductive films, and 680,000 pieces of packaging materials.

IV. Introduction of Electricity, Natural Gas, Steam, and Other Energy Prices

Power Supply: Three 220 kV substations (dual-circuit), three 110 kV substations, and one 35 kV substation have been built. A 500 kV substation is included in the national plan, with site selection and preliminary design work already initiated. Enterprises participate in market-based electricity trading. Currently, major electricity users in the park, such as Yuntianhua, Zhongsheng, Yinghe, and Pinxin, have an average annual electricity price of around 0.42-0.45 yuan/kWh. It is reported that Shuifu Yuntianhua Co., Ltd.'s average electricity price for the entire year of 2023 was 0.397 yuan/kWh (excluding tax).

Gas Supply: The Economic Development Zone has the main switch station for Sichuan gas entering Yunnan, with a daily natural gas supply capacity of up to 2 million m³. Gas supply companies can lay gas pipelines to the plots, and the industrial gas price is around 3 yuan/m³, with specific prices negotiable based on project requirements.

Water Supply and Drainage: The average flow rate of the Hengjiang River in the Economic Development Zone is approximately 280 m³/s, with an annual runoff volume of about 8.82 billion m³. The water source includes the Shuiqingba Reservoir, with a total storage capacity of 2.09 million m³, and the Sifangbei Reservoir, with a total storage capacity of 4.859 million m³. The daily water supply capacity of the tap water plant in the Economic Development Zone is 7,700 m³, and domestic water for enterprises can be supplied by the tap water plant at a price of around 2 yuan/m³. A sewage treatment plant with a designed daily treatment capacity of 1,000 m³ is under construction in the Zhangtan area, while the Loudaba area has a completed sewage treatment plant with a daily treatment capacity of 1,200 m³. The sewage treatment price is around 1.12 yuan/m³.

V. Introduction of Transportation and Location Advantages

Shuifu is located at the junction of Yunnan, Sichuan, Guizhou, and Chongqing, 50 km from Yibin Wuliangye Airport, about 300 km from Chengdu and Chongqing, about 500 km from Guiyang, and about 570 km from Kunming. Currently, Shuifu Port can accommodate five 3,000 mt berths, with a capacity of 1,000 mt during the dry season and 3,000 mt during the medium-high water season, with an annual throughput of 6-8 million mt. The central operation area is accelerating construction, and once completed and put into operation, Shuifu Port's annual throughput is expected to reach approximately 30 million mt. Ships can directly navigate to the Pacific Ocean via cities such as Chongqing, Wuhan, Nanjing, and Shanghai, with downstream freight rates of about 0.03-0.05 yuan/mt/km and upstream rates of 0.07-0.09 yuan/mt/km. The Neikun Railway passes through Shuifu and has a freight station with an annual transport capacity of 10 million mt, with railway freight rates of about 0.5 yuan/mt/km. The Yinkun (G85) Expressway traverses the Economic Development Zone, with three entry and exit stations, connecting to the national highway network via G85. Highway freight rates are about 0.9-1.1 yuan/mt/km.

VI. Supporting Facilities in the Region

Labour Resource Assurance: Shuifu has a labour force of 45,077 people, including 25,689 male workers and 19,388 female workers. By education level, 16,406 have primary school education or below (36.4%), 24,010 have junior high school education (53.26%), 3,443 have high school education (including vocational high school, technical secondary school, and technical school) (7.64%), and 1,218 have college education or above (2.7%). Shuifu and surrounding counties such as Yongshan, Yanjin, and Suijiang have about 150,000 surplus labourers. Enterprises recruit workers through the Shuifu labour market, which publishes recruitment information and organises job fairs in surrounding areas to meet employment needs. Labour costs range from 3,500 to 4,500 yuan/month. High-level talents in enterprises who meet the requirements can enjoy policies such as the "Xingtian Talent Support Plan," "Xingzhao Talent Support Plan," and the "Shuifu City Enterprise Talent Attraction and Training Incentive Measures (Trial)," as well as the "Thousand Talents Plan," "Ten Thousand Talents Plan," "Phoenix Plan," "Kunpeng Plan," and "Eaglet Plan."

Education and Medical Assurance: Shuifu has Yuntianhua Middle School, a first-class Grade A complete middle school in Yunnan Province, and Shuifu No. 1 Middle School, a first-class Grade C complete middle school in Yunnan Province. Shuifu People's Hospital, a Grade II Class A hospital, is located within Shuifu, while Yibin First People's Hospital and Yibin Second People's Hospital (Grade III Class A general hospitals) are only 30 km away.

VII. Project Matching in Shuifu City

(I) Sufficient Power Supply. Shuifu is within the power supply scope of China Southern Power Grid, with electricity prices determined through market-based transactions. The average electricity price is around 0.40-0.45 yuan/kWh, and the power supply is stable. There are three 220 kV substations, three 110 kV substations, and a 500 kV substation scheduled for construction in 2025.

(II) Convenient Logistics and Transportation. The Weiqiangba area is 600 m from the Loudaba exit of the Yinkun Expressway (G85), 9 km from Shuifu Railway Station, 3 km from Hengjiang Railway Station, and 11 km from Shuifu Port, which features multi-modal transport and transshipment. It is directly connected to the G247 National Highway and the Mashui Line via the Yinkun Expressway.

(III) Matching Element Conditions. A total of 1,156.9 mu of land is directly available for supply. Among them, the Loudaba area has a planned area of 2,372.25 mu, with 1,132.65 mu of planned industrial land, 36 mu of planned logistics and warehousing land, and 459.59 mu of remaining usable construction land. The Zhangtan area has a planned area of 3,031.95 mu (including 347.6 mu of undeveloped land in the Jiulong plot), with 2,008.65 mu of planned industrial land, 22.2 mu of planned logistics and warehousing land, and 697.39 mu of remaining usable construction land. A total of 114,644.66 m² of factory buildings are directly available for occupancy. The total construction area of standardised factory buildings in the Economic Development Zone is 240,000 m², with 96,070.24 m² already in use and 114,644.66 m² available for investment cooperation.

(IV) Excellent Business Environment. The integrated project for the annual production of 100,000 mt of lithium-ion battery anode material was signed in 29 days and landed in 20 days. The annual production project of 50,000 mt of LFP material achieved project signing within 28 days, showcasing the "Shuifu Speed." A high-efficiency, convenient, standardised, and first-class service business environment has been established.

(V) Other Negotiable Policies. After project landing, enterprises can enjoy national western region preferential policies and receive specialised tax guidance to ensure full access to applicable preferential policies. Other policies can be negotiated on a case-by-case basis.

(VI) Future Cooperation Directions. Shuifu City is applying for a chemical park designation, with plans to focus on new energy, new materials, and battery recycling projects in the future, enabling diverse cooperation and development.

   SMM Analysis: Currently, the lithium battery industry is developing rapidly. Although the overall capacity appears large, truly high-quality capacity remains scarce. Meanwhile, the sodium battery industry is in its infancy. With advantages in raw material safety and low-temperature performance, it is expected to become a strong complement to lithium and lead-acid batteries, with significant development potential.

According to SMM's industry trend analysis, global demand for sodium batteries is expected to exceed 160 GWh by 2030. By 2025, sodium battery demand is projected to reach 5 GWh.

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Phone: 021-20707875 (Yanlin Lü) or 021-20707860 (Chaoxing Yang). Thank you!

SMM New Energy Research Team