Liyuan Begins Phase 2 Expansion of Indonesian LFP Production Plant

Changzhou Liyuan

Chinese Lithium Iron Phosphate Producer Expands Capacity to Meet Growing Global Demand

Chinese lithium iron phosphate (LFP) producer Changzhou Liyuan has officially started building Phase 2 of its production plant in Indonesia. The second phase of the plant, with a designed capacity of 90,000 tonnes per year (t/yr), aims to strengthen Liyuan's position in the growing global LFP market. However, specific details about the construction period and expected launch date have yet to be disclosed.

This expansion follows the successful completion of the first phase, which began in July 2023 and had a capacity of 30,000 t/yr. The first batch of LFP material is expected to be produced in January 2025. Located in the Kendal Industrial Park in Central Java, Indonesia, this plant represents a significant step in China’s strategic investment in overseas battery material production.

Strategic Investment in Overseas Capacity

Liyuan's plant in Indonesia is the first overseas LFP production project by a Chinese company with a capacity exceeding 10,000 t/yr. This milestone reflects China's growing commitment to securing international battery feedstock resources. While many Chinese investments in Indonesia have historically focused on primary materials or intermediates, this project marks a shift toward direct investment in battery materials, essential for the global electric vehicle (EV) market.

The expansion also highlights the broader trend of Chinese battery firms investing heavily in overseas manufacturing capacity. These investments are seen as crucial for diversifying supply chains and mitigating geopolitical risks, ensuring a stable supply of LFP materials amidst increasing global demand.

Rising Demand for LFP in the Power Battery Market

LFP's popularity in the power battery market has surged due to its lower manufacturing costs and enhanced safety compared to other battery chemistries. As the demand for electric vehicles continues to rise, LFP's market share is expected to grow even further, with Liyuan's expanded capacity playing a key role in meeting this demand.

In conclusion, Liyuan’s Phase 2 expansion in Indonesia marks a strategic move to enhance global production capacity and supply chain diversification. With the growing importance of LFP in the energy transition, this project is a significant step forward for both Liyuan and China’s battery material supply chain.