Overseas Factory Construction Blocked: Putailai's Billion-Level Anode Material Project Terminated!

On the evening of December 19, Putailai (603659) announced that on December 18, the company received a notification from the Swedish Inspectorate of Strategic Products. Due to the company's inability to fully agree to the conditions proposed by the Inspectorate under Sweden's Foreign Direct Investment Act for the company's planned investment project of a 100,000 mt integrated production site for lithium-ion anode materials in Sweden, the investment was not approved. In light of the aforementioned decision by the Swedish Inspectorate of Strategic Products, the company intends to terminate the implementation of the 100,000 mt integrated production site project for lithium-ion anode materials in Sweden.

According to an announcement released by Putailai in May 2023, the company, through its wholly-owned subsidiary Putailai (Singapore) Pte. Ltd., invested in establishing Zichen Technology (Sweden) Co., Ltd. in Sweden and initiated the construction of a 100,000 mt integrated production and R&D site for lithium-ion anode materials. It was expected to achieve a capacity of 50,000 mt of anode materials by 2025 and 100,000 mt by the end of 2026 or early 2027.

Reportedly, the project was originally planned with an investment amount not exceeding SEK 15.7 billion (approximately 10.5 billion yuan), of which about 30% was expected to be funded with the company's own funds, while the project loan financing scale was planned to be about 70%. Preliminary financing arrangements had been made with banks and financial institutions at home and abroad.

Under Sweden's Foreign Direct Investment Review Act, effective in 2024, Putailai submitted a foreign direct investment declaration to the Swedish Inspectorate of Strategic Products in February 2024. In June 2024, the Inspectorate decided to initiate a review of the investment.

On December 3, 2024, the Swedish Inspectorate of Strategic Products proposed multiple requirements for Putailai's investment project, involving aspects such as the control of Zichen Sweden's equity, the composition of the management team, the ownership of R&D results, and regulatory arrangements.

After careful evaluation and in-depth discussions, Putailai concluded that these requirements posed significant challenges in terms of commercial logic and practical operations and proposed more feasible solutions. However, during further communication with the Swedish Inspectorate of Strategic Products, the Inspectorate did not agree to Putailai's feedback.

On December 18, 2024, Putailai received a notification from the Swedish Inspectorate of Strategic Products that the investment was not approved. The company may still appeal to the Swedish government within the stipulated time frame.

Putailai stated that the aforementioned project had not been specifically implemented, and apart from preliminary project expenses, no actual capital expenditures had been incurred. The amount spent on various preliminary feasibility studies was approximately 14 million yuan, which is manageable and has a relatively small impact on the company's financial position. The company will continue to monitor industrial and trade policies in major countries globally and will pursue overseas capacity expansion if suitable opportunities arise. Moving forward, the company will actively communicate with overseas-demand customers to seek alternative medium and long-term supply solutions.

According to available information, Putailai's main business covers anode materials, coated separators, PVDF and adhesives, composite current collectors, aluminum-plastic packaging films, nano-alumina, boehmite, and other materials. It also provides automated process equipment and intelligent manufacturing systems for the new energy battery and battery materials industries. In the field of anode materials, Putailai currently has an annual capacity of 150,000 mt at its production sites in Jiangxi, Liyang, and Inner Mongolia. Its production site in Sichuan is under construction with a planned capacity of 280,000 mt per year, which can meet the capacity demands of domestic and international customers.