Asahi Kasei to Build LIB Separator Plant in Canada

Asahi Kasei Corp. will construct an integrated plant for the base film manufacturing and coating of Hipore™ wet-process lithium-ion battery (LIB) separator1 in Ontario, Canada. In relation, Asahi Kasei has concluded a basic agreement with Honda Motor Co., Ltd. Accordingly, the two parties are currently studying joint investments.

Asahi Kasei Canada
Conceptual image of initial facility

Moreover, Asahi Kasei Battery Separator Corp.2, which is scheduled to be established in October 2024, will receive funding from the Development Bank of Japan Inc. (DBJ) through the issuance of preferred shares. Furthermore, the project will receive financial support from the federal government of Canada and the provincial government of Ontario.

In total, the company projects investments of ¥180 billion, with a target annual production capacity of 700 million m2. Also, the company plans to start commercial operation by 2027.

The necessary funds for this investment will be provided to ES Materials Canada Corp., the Canadian separator business company, and E-Materials Canada Corp., the local manufacturing company responsible for plant construction and manufacturing. The company will channel it to ES Materials Holdings Corp., the North American separator business company.

LIB Separator at Core of Energy Storage Business

Asahi Kasei positions its Energy Storage-related business as one of the “10 Growth Gears” (GG10). Specifically, it aims to drive future growth in its medium-term management plan for fiscal 2024, which is focused on the theme “Be a Trailblazer”. At the core of its Energy Storage business is Hipore™ wet-process LIB separator. Specifically, it is a top technological innovation in over 40 years of its business history. Also, Hipore™ wet-process LIB separator sees sales expansion in automotive and consumer electronics applications.

Primarily, the construction of an LIB separator manufacturing plant in Ontario aims to meet the demand for battery separators for plug-in electric vehicles in North America. Also, it aims to join North American LIB supply chains being established. This is in part, an effect of governmental clean energy policies.

Investment structure in North America

Basic Agreement with Honda

Asahi Kasei and Honda have reached a basic agreement related to this project. It is based on the shared understanding that it is essential to establish a supply chain for the stable supply of high-performance batteries for the North American plug-in electric vehicle market. Particularly, this market is expected to grow over the medium to long term. Considerations for the establishment of a joint venture to manufacture Hipore™ separator for batteries are advancing. Specifically, these batteries are for installation in EVs made by Honda and other vehicle manufacturers for the North American market.

“To achieve carbon neutrality, Honda is targeting 100% of global sales from EVs and FCVs by 2040,” said Manabu Ozawa, Managing Executive Officer of Honda. “The separator is an extremely important component that contributes to higher performance and durability of batteries essential to EVs. We are very excited to partner with Asahi Kasei, having outstanding technological capability and broad expertise regarding separators. This will allow us to realize highly competitive EVs that can meet future growing demand in the North American market.”

“The Hipore™ business will play an important role in Asahi Kasei’s growth over the medium term,” added Hiroyoshi Matsuyama, Senior Executive Officer of Asahi Kasei. “Capturing market growth in North America will be essential for us. This partnership with Honda has achieved a rich track record in the North American automotive market and aggressively electrifies its vehicle lineup. Thus, it allows us to make a meaningful contribution to improve LIB performance. This is in light of anticipated growth in the electric vehicle market and the energy transition in North America.”

Financing from DBJ

In constructing the manufacturing plant for Hipore™ separator in Canada, it has been decided that Asahi Kasei Battery Separator will receive funding of ¥28 billion by issuing preferred shares to DBJ. This is treated as a project that enhances the competitiveness of LIB separator business and strengthens LIB components supply capability.

Financial and Other Government Support

Asahi Kasei strives to achieve adequate production scale based on market expansion while reducing investment risk. Also, it expects to receive financial support from the federal government of Canada and the provincial government of Ontario, through its investment attraction agency, Invest Ontario. In addition, it will also receive support under the Sept. 2023 memorandum of understanding between Canada and Japan concerning battery supply chains.

1A lithium-ion battery separator is a microporous membrane that provides a barrier between the positive and negative electrodes of a lithium-ion battery. It allows lithium ions to pass through while preventing short circuits.

2Please refer to the press release “Transfer of lithium-ion battery separator business by corporate separation (simplified absorption-type separation)” dated February 7, 2024.

-25 April 2024-