Lithium-ion battery production increased to 200 million cells

20th January 2020

VARTA

Lanna Deamer

0 0

The growth of VARTA is driven by sustained high customer demand for lithium-ion batteries in a market experiencing annual growth of around 30%. The Executive Board of VARTA has therefore decided to significantly expand production capacity once again, and more quickly than originally intended. Following last year's plans to increase production capacity to over 150 million cells per year from 2022, VARTA will now expand its capacity to 200 million cells per year, with implementation scheduled for the end of 2021.

As early as mid-2020, the company will be able to produce at least 100 million cells per year. The next step in innovation is also just around the corner: later this year VARTA will present a lithium-ion cell that offers a 15% higher energy density combined with improved cycle stability.

In this way, the company continues to set the industry standard with its innovations and cements its leadership in technology.

Herbert Schein, CEO of VARTA, said: "Our future clearly lies especially in the field of lithium-ion technology. Here, as an innovation leader, we set the industry standards. This has allowed us to gain unique competitive advantages, which we safeguard through patents and rapid advances in innovation. With the accelerated expansion of our production capacities announced today, we are not only continuing to build on our strong market position, but are also creating further 600 new jobs in our region."

Strong cash flow enables major investments

The capacity expansion requires an additional investment volume of around €125m (for additional 50 million cells per year). The investment volume will be financed using the cash flow from operating activities, advance payments from customers and, in the medium term, the attractive cash flow of the newly acquired VARTA Consumer business.

In addition, the Group can draw on a revolving credit line of €80m. Chief Financial Officer (CFO) Steffen Munz added: "We continue to record extremely high order volumes. Our very healthy balance sheet allows us to continue investing heavily, and our solid and rising cash flow will also play its part."

600 new jobs will be created in Germany

The investments will be made at the two main production sites for lithium-ion cells in Germany, in Ellwangen and Nördlingen. At the Ellwangen site, alongside lithium-ion cell production, a new production facility will significantly expand our electrode production.

At the Nördlingen site, lithium-ion cell production will also be increased by establishing a new production facility adjacent to the existing plant. With its high level of investment in the further expansion of production capacity for lithium-ion batteries, the VARTA AG Group will create around 600 additional jobs in this area.