JSE-listed Metair, the international manufacturer, distributor and retailer of energy storage solutions and automotive components, is on track to commission its first lithium-ion battery production line in Bucharest in Romania in November.
Metair MD Theo Loock says R200 million has been invested in the production line and confirms there is a possibility of establishing similar lithium-ion battery production lines in South Africa and Turkey “in the future if needed”.
The investment in lithium-ion battery production follows Metair in 2017 confirming that it was embracing disruptive technologies such as electric vehicle technology.
Accepting the EV challenge
Loock said in an investor presentation in December 2017 that Metair’s mindset was to accept the electric vehicle challenge and the possibility of a 100% electric vehicle production scenario “sometime in the future”, which posed a threat to its lead acid battery business.
He said at the time this meant Metair had to plan the group’s path to real electric vehicle relevance and “electric vehicle proof the business”.
This followed Metair’s announcement a month earlier that it had launched a programme to produce lithium-ion batteries across its operations in South Africa, Turkey and Romania that leveraged local raw materials use and intellectual property, which resulted in the company partnering with universities and industry agencies for production and certification.
Locally, Metair partnered with the South African Institute for Advanced Materials Chemistry at the University of the Western Cape, the only pilot scale lithium-ion battery cell assembly facility in Africa.
Loock said on Friday that Metair is doing some raw material development in SA, such as chemistry development in aluminium foil with the university, which has a lithium-ion test line.
“It’s all on the academic side of the chemistry development,” he said.
Loock said the lithium-ion production line in Romania has the capacity to produce between 600 000 and 1-million cells a year depending on what chemistry they apply to the production process.
He said Metair had sufficient takeoff to use all of this capacity itself in its electric conversion business, Prime Motors.
Metair acquired a 35% shareholding in Prime Motors in February last year with the stated intent of gearing it to be the company’s incubator and research and development centre for lithium-ion battery development.
Loock said Metair also has contracts to convert or electrify buses and ferries.
The company last week reported improved financial performance in the six months to June.
Loock said Metair’s energy storage vertical, Mutlu Akü in Turkey, achieved an 85% increase in exports while growing the aftermarket in a tough economy and maintaining original equipment manufacturer volumes in a declining market. He added that its automotive components vertical benefitted from improved manufacturing volumes, customer diversification and a higher level of localisation.
Metair grew its revenue by 19% to R5.3 billion, with its operating profit improving by 21% to R499 million.
Its headline earnings a share increased by 21% to 160c.
Shares in Metair declined by 0.22% on Friday to close at R22.30.