Last updated : June 27, 2024 10:09 am
Our core group strength and synergy are in manufacturing complex Fluorine & chemical derivatives such as Fluoropolymers and Fluoroelastomers
How has the performance been of Gujarat Fluorochemicals Limited (GFL) in 2023-24? What is the expectation from 2024-25? What are the key achievements in 2023-24?
The year 2023-24 has been challenging overall for both the chemical industry as a whole and for GFL. One of our most important verticals – our Fluoropolymers segment – was impacted by destocking in Europe. As a result, our results for FY 2023-24 were muted as compared to the previous year.
However, moving forward, the destocking phenomenon seems to be phasing out and we expect to see continuous growth quarter on quarter from hereon. FY25 is also expected to reflect some of the positive impact from the exit of legacy players in the Fluoropolymers segment.
Our EV business, GFCL EV, saw the commissioning of the initial phase of its integrated battery materials manufacturing facility. With battery agnostic offerings covering both Lithium Iron Phosphate (LFP) and Nickel Manganese Cobalt (NMC) batteries, the GFCL EV product portfolio caters to around 40% value of LFP battery cost. With a CAPEX of Rs. 6,000 crore already announced for the next 3 years, we aim to tap significant global opportunities presented by the Electric Vehicle (EV) and Energy Storage System (ESS) ecosystems.
What are the emerging challenges and opportunities for the EV market in India?
Customer perception of range anxiety remains a significant hurdle in India's EV adoption journey. The limited charging infrastructure adds to this worry and poses a challenge to widespread EV adoption.
Additionally, the price disparity between internal combustion engine (ICE) vehicles and EVs remains a barrier for many consumers. However, fostering domestic manufacturing and incentivizing local production of EV components can drive down production costs, making EVs more affordable and competitive in the Indian market.
The opportunities mainly involve government initiatives aimed at curbing vehicular emissions, such as the implementation of policies like the Production Linked Incentive (PLI) scheme for Advanced Cell Chemistry batteries, coupled with state-level subsidies to facilitate the establishment of electric vehicle manufacturing, underscore a strategic focus on sustainability and innovation. These measures, alongside the burgeoning domestic market spanning various segments including passenger vehicles, two and three-wheelers, present a landscape ripe with opportunities for growth and development within the EV sector.
What is the current market demand for battery chemicals, and how does GFCL EV Products plan to capitalize on this demand?
In the past few years, a number of factors have impacted the global EV markets and hence the battery chemicals market by extension. Some of the key markets are now beginning to mature and what they need are reliable, uninterrupted supply chains together with availability of affordable battery metals. Global disruptions like the Russia-Ukraine conflict have impacted both these areas. Add to that the investments companies have already made in capacity and technology development, and the impact on prices and availability cannot be missed.
On the other hand, the global focus on environment protection and promotion of EVs has resulted in significant expansion in the global EV market. Nearly 14 million new electric cars were sold worldwide in 2023.
In the face of these global scenarios, India’s EV market has been remarkably resilient. EV adoption in India is still in its nascent stages, but growing leaps and bounds. Driven by adoption of two-wheeler (2W) and three-wheeler (3W) segments, EVs are projected to account for around 40% of total vehicle sales in India by 2030. For the battery and battery chemicals market, this means that the demand will remain robust, which is good news for companies like GFCL EV.
With our product offerings in the areas of Cathode Active Materials, Electrolytes, Battery Binders and Additives, and the dependability of GFL’s Fluoropolymer expertise and supply chain reliability, we are strategically positioned to capitalize on this enhanced demand both in India as well as globally.
GFCL EV Products Ltd’s vision is to evolve as a respected EV and Energy Storage components company. What is your strategy to achieve this vision?
We aspire to establish ourselves globally as a reputable company specializing in EV and ESS components. Our strategic approach to realizing this vision involves becoming a leading material solutions provider to the burgeoning battery manufacturing sector in India, thus facilitating the widespread adoption of EVs and actively contributing to the reduction of carbon footprints.
To achieve this, we are committed to aligning our growth trajectory with market demands, while judiciously allocating resources, including capital investment, to support our expansion and innovation efforts.
The company recently announced an investment of Rs 6,000 crore over the next 4-5 years in EV and ESS battery solutions. Major chunk of the investment is earmarked to set up a battery chemicals factory in Gujarat. Could you please share details with us?
In the preceding two financial years, our company has made considerable investments to increase our production capabilities across both intermediary and finished product categories in the lithium-ion battery materials sector. Notably, in the last quarter of the fiscal year 2024, we successfully commissioned two new plants dedicated to battery materials production.
Moving forward, our strategic direction entails aligning our growth trajectory with market demands. We intend to judiciously allocate capital expenditure (CAPEX) towards augmenting our manufacturing capacities to meet the evolving needs of the market.
Can you also outline the company's manufacturing capabilities and capacity for battery chemicals?
Our core group strength and synergy are in manufacturing complex Fluorine & chemical derivatives such as Fluoropolymers and Fluoroelastomers. Within this niche, we proudly stand as one of the select global players, distinguishing ourselves as the sole Indian manufacturer with exports reaching mature markets.
Regarding our battery chemicals capacity, our existing infrastructure is poised to support approximately 5~6 GWh of battery production. This capability underscores our commitment to diversifying our portfolio while leveraging our core competencies to contribute meaningfully to the EV industry.
How are you going to differentiate your battery technology from other industry players?
We have implemented rigorous quality systems at every stage of production, ensuring that our solutions consistently meet the highest standards of battery grade purity, quality and reliability.
This expertise uniquely positions us to provide material solutions that prioritize both quality and cost-effectiveness. Whether catering to domestic or overseas markets, our commitment to excellence allows us to stand out among competitors, offering innovative solutions that address the evolving needs of our customers with precision and efficiency.
Can you provide an overview of the types of battery chemicals that GFCL EV Products aims to specialize in and their applications?
GFCL EV Products specializes in various segments of battery materials, each catering to specific applications within the electric vehicle and energy storage sectors.
In the cathode segment, we offer Lithium ferro phosphate (LFP). In the electrolyte segment, we are present in both the salt (LiPF6) and finished electrolytes. We intend to produce two key additives in the electrolyte segment and we offer PVDF/PTFE in the binder category.
By strategically focusing on these key segments, we ensure a comprehensive offering that meets the diverse needs of battery manufacturers, supporting the advancement and adoption of electric vehicles and energy storage solutions.
You have also announced setting up a cell performance testing lab to drive innovation in EV/ESS applications this year. Please share details with us?
We are happy to announce the establishment of our Performance Testing Lab (PTL), scheduled for commissioning in the third quarter of this fiscal year. Equipped with state-of-the-art equipment, our PTL will facilitate comprehensive cell-level testing, encompassing both coin and pouch cells. Through this, we also aim to foster collaboration with our customers, enabling us to tailor material solutions to meet their specific cell requirements effectively.
How does the company ensure the sustainability and environmental friendliness of its EV and battery products?
Ensuring the sustainability and environmental friendliness of our EV and battery products is a paramount commitment for us. We were among the first companies in India to receive carbon credits issued by the United Nations Framework Convention on Climate Change (UNFCCC) in 2006, demonstrating our early dedication to environmental stewardship.
We adhere to various regulatory requirements, including Environmental, Social, and Governance (ESG) standards. Our compliance measures include:
• ISO 14001:2015 certification for Environment Management Systems, ensuring that our environmental impact is rigorously managed.
• ISO 9001:2015 certification for Quality Management Systems, guaranteeing the quality and reliability of our products.
• Responsible Care certification, underscoring our commitment to the safe and sustainable handling of chemicals.
• ISO 45001:2018 certification for Occupational Health & Safety Management Systems, prioritizing the well-being of our employees.
• SA-8000 certification for Social Accountability, emphasizing our commitment to ethical labor practices.
• ISO 26000 certification for Social Responsibility, ensuring that we operate ethically and contribute positively to society.
• ISO 20400 certification for Sustainable Procurement, affirming our dedication to environmentally and socially responsible sourcing practices.
By diligently adhering to these standards and certifications, we uphold our responsibility to the environment, society, and future generations.
With the increasing focus on sustainability, how do you see the future of electric mobility evolving, and where do GFCL EV Products fit into this future landscape?
We strongly believe that the future of electric mobility, both in India and globally, is very bright and promising. The transition from Internal Combustion Engine (ICE) vehicles to Electric Vehicles (EVs) is experiencing exponential growth, spanning both personal and mass transportation sectors within India.
Lithium-ion batteries (LiB) have emerged as the leading energy storage solution globally, powering the EV revolution, while alternative technologies like sodium-ion batteries are also advancing. In this landscape, GFCL EV Products is positioned to play a pivotal role by providing innovative material solutions that contribute to a cleaner and greener planet.
In your opinion, how crucial is EV battery recycling in mitigating the environmental impact of electric vehicles?
Definitely, EV battery recycling plays a crucial role in mitigating the environmental impact of electric vehicles. In fact, this practice has gained significant traction worldwide, particularly in markets such as China, Japan, and Europe, where initiatives for EV battery recycling are already underway.
By recycling EV batteries and extracting precious metals such as Lithium, Cobalt, and Nickel, we can effectively reduce the environmental footprint associated with battery production and disposal.
What partnerships or collaborations has the company established to support its EV and battery initiatives?
The company has cultivated in-house capabilities in Fluorine chemistry over the past three decades. With a combination of in-house R&D and partnership with external consultants, we enhance our expertise and bring innovative products and processes to fruition.
Moreover, we continuously seek partnership and collaboration opportunities that promise to strengthen our technology, quality standards, output, and overall solutions for our customers.