China (mainland) – Sealed lead acid battery manufacturers in Quanzhou, Fujian are ramping up production by as much as 50 percent to meet increasing domestic and overseas demand, particularly from the automotive and telecom sectors.
The region is expected to account for $333 million of the estimated $8.6 billion to $9.3 billion revenue of mainland China in 2010. China’s lead acid battery industry accounts for about a third of the world’s supply and is estimated to grow by 20 percent in the next few years.
Quanzhou exports about 80 percent of its total sealed lead acid battery output to overseas markets such as Europe, North America, Southeast Asia, East Asia, the Middle East and Australia.
Manufacturers in the area are now focusing on developing new types of sealed lead acid batteries that meet the higher requirements demanded by the automotive and telecommunication sectors. R&D activities center mainly on creating new models with long life, and high-power and high-capacity ratios. Quanzhou Dahua Battery Co. Ltd, meanwhile, is improving the density of its SLA batteries designed for uninterruptible power supplies (UPS), electric vehicles and emergency lighting applications.
Rising raw material cost continues to be a concern among local manufacturers. The cost of lead, a key material, has increased by more than 25 percent. The cost increase has prompted a few manufacturers to secure long-term contracts with material suppliers. Others were forced to recycle wasted batteries or other lead materials to reduce production cost.
Already, manufacturers have jacked up product prices by as much as 15 percent in end 2007 to narrow down losses in profit margins.
Eco-friendly production is also a major concern among manufacturers. Suppliers are addressing the issue by setting up new workshops equipped with new and efficient equipment.
Quanzhou Kedi Power Source Co. Ltd, for instance, is investing $2.6 million in a new 7,000sqm workshop installed with two fully automatic assembly lines. Its planned expansion will continue in the next few years. In 2007, the company earned $18 million in revenue.
Note: All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.