April 7, 2022: Chinese lead and lithium batteries group Leoch said in its full-year results announced on March 31 that strong overseas demand for batteries helped it increase profit and revenue in 2021.
Net profit for the period, ended December 31, was Rmb166.7 million ($26 million) — up from Rmb138 million in 2020.
Overall revenue increased 17.4% over the previous year to more than Rmb11.3 billion.
Revenue from lead acid batteries was nearly Rmb9.25 billion (Rmb8.3 billion in 2020) and recycled lead products totalled revenue of more than Rmb2 billion (Rmb1.3 billion).
Leoch chairman Dong Li said the increase in batteries revenue was boosted by overall growth of 27.3% in overseas markets, while growth in the domestic Chinese market was 0.4%.
Revenue from the EMEA region increased 36.2% to almost Rmb1.9 billion. In the Americas, revenue was up 50.2% to more than Rmb1.5 billion while revenue fell 12.6% in the Asia-Pacific region (excluding China) to just over Rmb780 million.
Li said overseas buyers had turned to Leoch as a “stable source of supply” amid continued disruption in global production — despite longer delivery times caused by global delays in sea freight as international markets began their recovery from pandemic lockdowns and related restrictions.
Revenue from recycled lead products rose to more than Rmb2 billion (previously Rmb1.3 billion).
Li said Leoch’s recycling plant was fully utilized in 2021, hitting its permitted maximum production capacity of 200,000 tonnes.
Revenue of around Rmb1.367 billion came from the sales of recycled lead products in 2021 to an unnamed single customer, which contributed to more than 10% of the total revenue of the group — including sales to a group of entities which Li said were known to be controlled by that customer.
Meanwhile, Li said Leoch continued working on new models of lead acid and lithium ion batteries and “rolling out new products tailor-made for applications in each of the network power and motive market segments.
“Although there was no aggressive expansion in production capacity for lead acid batteries in 2021, we are gradually expanding our production capacity in lithium ion batteries according to our strategic plan.”
However, Li said Leoch had hit the “fast forward button” since 2020 in producing products to support the development of 5G telecoms networks, including lead and lithium batteries for various applications.
He said 5G projects were forecast to rapidly increase demand for lithium batteries in base stations from 2021 to 2025, adding: “We expect the demand for lithium iron phosphate batteries used in communications will continue to expand.”
Leoch aims to use its lithium ion manufacturing base to capture new opportunities in the LFP sector, Li said.