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| Changzhou Liyuan |
Chinese Battery Material Producer Doubles Capacity with Phase 2 Expansion
Chinese lithium iron phosphate (LFP) producer Changzhou Liyuan has commenced Phase 2 expansion of its production plant in Indonesia. The new phase, designed to add 90,000 tonnes per year (t/yr) of capacity, will strengthen Liyuan’s role in the global LFP market. However, details regarding the construction timeline and expected operational start date remain undisclosed.
This expansion follows the successful completion of the plant’s first phase, which started operations in July 2023 with a capacity of 30,000 t/yr. The first batch of LFP material from Phase 1 is expected to be produced in January 2025. Located in the Kendal Industrial Park, Central Java, this plant is a key step in China’s strategic investment in overseas battery material production.
Strategic Move Toward Global Battery Material Supply
Liyuan’s Indonesian facility is the first overseas LFP production project by a Chinese company with a capacity exceeding 10,000 t/yr. This reflects China's increased focus on securing international battery feedstock resources. Unlike previous Chinese investments in Indonesia, which largely targeted primary materials or intermediates, this initiative marks a shift toward direct investment in finished battery materials.
The expansion aligns with the broader industry trend of Chinese battery firms investing in overseas manufacturing. Such investments are essential for supply chain diversification and reducing geopolitical risks. By expanding in Indonesia, Liyuan ensures a stable supply of LFP materials, crucial for the global electric vehicle (EV) market.
Growing Demand for LFP Batteries in the EV Sector
LFP batteries have gained popularity due to their lower production costs and enhanced safety compared to other battery chemistries. As EV adoption accelerates, the demand for LFP is expected to rise further. Liyuan’s expanded capacity will play a key role in meeting this increasing global demand.
Liyuan’s Phase 2 expansion marks a significant milestone in global LFP production and supply chain diversification. With LFP playing a crucial role in the energy transition, this project strengthens both Liyuan’s market position and China’s influence in the battery material sector.
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