Global polyvinyl chloride (PVC) producer Orbia reached a preliminary joint-venture agreement with European chemicals producer Solvay to construct two plants in the southeastern US for battery-grade polyvinylidene fluoride (PVDF).
PVDF is a specialty polymer that comes in various forms such as pipe, sheet film, or insulators. Among its applications, usage in lithium-ion batteries is of growing interest as the world shifts to electric cars.
Under the terms of the preliminary agreement, Solvay's ownership of the project would be 51pc, with Orbia owning the other 49pc. A more definitive agreement is still in progress as the two companies wait for regulatory approval and work to reach a mutual satisfaction with terms.
In total, the investments under the deal come to $850mn with the initial spending and engineering beginning in late 2023 and construction concluding for both sites by the middle of 2026. One plant would be built by Solvay in Augusta, Georgia, with the second plant location not yet announced. One plant would be used for raw materials while the other would create finished products.
The new plant would result in the only battery-grade suspension PVDF plant in North America with capacity of about 20,000 metric tonnes (t), according to Orbia's statement.
Originally announced in November 2022, the agreement would utilize Orbia's North American sources of key feedstock ingredients such as hydrofluoric acid, chlorine, and vinyl chloride monomer (VCM).
As the supplier of 20pc of the world's fluorine, a key initial ingredient to the lithium-ion battery production chain, Orbia is the only producer capable of securing a North American supply chain for battery production, according to the company's chief executive, Sameer Bharadwaj.
In turn, Solvay provides its leading technology and production knowledge for PVDF, as well as its qualified relationships with all major battery producers.
Solvay also received a $178mn grant under the American Battery Materials Initiative, which would go towards construction of the Augusta, Georgia plant. The initiative issued a total of $2.8bn in grants from the US Department of Energy in the second half of 2022 as part of the Inflation Reduction Act (IRA).
The IRA provisions and incentives for electric car production in the US, combined with investments into a nationwide car charging grid authorized by the Infrastructure Investment and Jobs Act, have spurred rising demand in the US for electric cars.
Alongside the government investments, Orbia also cited the nearshoring trend occurring in US industry at large. Within the IRA, subsidies of $7,500 per vehicle are offered only if the vehicle does not include Chinese-sourced materials and components, with the burden of proof being on US automakers.
"Today China dominates the supply of many of these materials, and so to secure the North American Supply chain, demonstrating non-Chinese origin, is critical." Bharadwaj said. "That will benefit us."
