Himadri Speciality To Set Up India's First Lithium Iron Phosphate Plant

Himadri Speciality Chemical Ltd. will invest Rs 4,800 crore to set up India’s first lithium iron phosphate cathode active material plant in Odisha in two phases by 2030.

At full capacity, the plant will manufacture 2 lakh tonne of cathode material and will be set up over the next five to six years, said Anurag Choudhary, managing director and chief executive officer of Himadri Speciality Chemical.

“Cathodes constitute around 52% of the lithium-ion battery cost. The LFP-based batteries will help reduce the cost of Li-ion batteries from the second phase onwards, once we start manufacturing the lithium carbonates ourselves. Also, LFPs don’t have precious metals like nickel and cobalt used in NMC (nickel manganese cobalt) batteries,” said Choudhary.

The company expects to grow exponentially in the coming years after the first phase of setting up the plants (40,000 tonne capacity), which will become operational in the next 27–36 months, he said.

“We expect our revenue to grow over four times by FY30 to Rs 20,000 crore once we achieve full capacity,” Choudhary said. The company expects a return on capital employed of over 25% from the new business, as compared with 18–20% from the specialty chemical business, he said.

Himadri Speciality is also working on various other chemicals to overcome issues of long-distance travel for electric vehicles, where NMC batteries work better due to their higher density.

“We are working on lithium manganese iron phosphate cathode material as well; that will help provide performance that is much better compared to NMC batteries at a cost that is only marginally higher,” Choudhary said.

The company hopes to manufacture the LMFP cathode material during the second phase of expansion.

For the new energy business, Himadri Speciality has set up a holding company called Himadri Clean Energy Ltd., under which there will be a wholly-owned subsidiary, Himadri Future Material Technology, that will take care of all new energy businesses.