New Polymer Lithium-ion Battery Industrialization Business Plan - PowerPoint PPT Presentation

New Polymer Lithium-ion Battery Industrialization Business Plan

[Contact] Zhao Yingjian Wang Wensheng Zhang Jianguo

[Telephone] 13901051197 13901369956

[Fax] 86-10-67886099

[E-mail] zhaoyingjian516 @yahoo.com.cn

Zjg2011@sina.com

[Address] No. 15 Yuncheng street econmy technology development district Beijing

[Postcode] 100176

1.1 Project profile

• The high energy, environmental protection and safe large power battery is the broad needs and urgent demand of the model industry.

The focus area of the energy storage battery is also the hot project that developed countries is positively researching。Who first occupies this cutting edge field, will own unlimited market and substantial returns.

• The level of China's lithium-ion battery technology is basically the same, and the production capacity is in the world top.

However, more of them are small and medium energy storage batteries, Most are used in electronic watches, digital cameras, mobile phones and other small devices. And taking the production and application of the lithium battery as power battery is the hot field that countries are vigorously researching and testing.

• The technology workers of Shenzhou Yuanwang Company have had a significant breakthrough In the field of polymer lithium-ion battery production technology.

In 2005, Shenzhou Yuanwang products were recognized in the new polymer lithium-ion power battery result survey meeting hold by PLA's General Armament Department of test equipment measure Center; China Aerospace Command and Control Centre; Chinese Academy of Sciences Institute of Physical and Chemical Technology. The units who participated the meeting included: General Armament Department, General Logistics Department, the Department of the Navy equipment, the Navy weaponry Institute, the General Logistics Department Quartermaster Equipment Institute, the Chinese Academy of Sciences Institute of Automation, etc.

• Measured data showed: China Yuan Wang's new battery performance has far exceeded all current lithium-ion batteries.

Compared it to the batteries which generally used by world navy currently, the energy density ratio increased nearly five times, the duration of discharge increased six times, and the battery charging time decreased by nearly three times. Compared to the other batteries, all the other safety indicators were largely risen. Then China Yuanwang cooperated with Navy's armament department and the General Staff Department communications sector. Started tests, and achieved a satisfactory result for each all the parties.

• Nov. 2006, Shenzhou Yuanwang's new polymer lithium-ion battery project was approved by the State Ministry of Science and Technology "State Torch Project“. And in the battery industry, Shenzhou Yuanwang is the only one company who got the approval.

1；The lithium-ion battery has excellent charge and discharge performance and environmental advantages, is expected to 5-10 years will be fully occupied the second charge market.

2；Sony lithium-ion batteries once occupied 90% of the market of the laptop and digital products. However, the production process is still no breakthrough in the existence of obstacles, after listing products have fires, explosions and other serious accidents. Only last year, 4 million batteries were recalled in the world, the countries around world changed orders to South Korea, but the production capacity was limited, so there were large areas of “battery shortage” last year.

3；China's current production capacity of the batteries and quality are fairly well-developed, in 2005, Japan’s Sony hold shares of Dongguan New Energy Battery Company with 1.7 billion RMB. Japan and South Korea built their production base in Suzhou. Other domestic battery manufacturers have also joined the competition. However, generally, the products specifications are small, the energy could not get risen, basically all belong to energy storage lithium battery. The largest lithium-ion battery practically input now is used in laptop, the large power battery is basically nickel-cadmium batteries, silver zinc batteries, lead silver oxide batteries and hydrogen fuel cells. However, compared the batteries mentioned above with polymer lithium battery, they have many problems are difficult to solved, such as low energy, obviously self consumption, poor safety, big weight, difficult maintenance, environmental pollution, recycling difficulties, short life cycle, etc.

4；In China’s “Ninth Five-Year” period, lithium-ion battery project was listed in national”863” plan, and institutes and companies who join in the lithium battery research and development are keep increasing.

• Countries in the world are to pay close attention to the development and applications of lithium batteries

Recent years, developed countries in the world are in the development of the lithium-ion battery, taking the lithium-ion battery as the power source of vehicles and some weapons. Japan set up development institute to research lithium-ion battery using on submarine, and tests have been carried out for many years; France is developing 3000Ah lithium battery which is used on submarine; Russia purchases lithium-ion batteries from China, and uses in the assessment and research of conventional submarine. The researches in these countries are in conducting.

• China has made some progress in lithium-ion battery application

In the implementation of China's "973" program, the Department of the Chinese Navy Equipment has already begun the application trial of lithium-ion battery. Some polymer lithium-ion batteries produced by Shenzhou Yuanwang Caompany have passed performance tests, which can greatly enhance the operational performance of equipment. Currently, some products have been officially included in the sequence of military equipment

• The most important and urgent task is taking the industrial advanced technology in to various areas of reality application as soon as possible

By the relevant authority institute testing, the polymer lithium batteries produced by Beijing Shenzhou Yuanwang Technology Co., Ltd integrated the advantages of polymer and liquid lithium, and used the world’s most advanced technology in design, used world’s advanced technology in production and had some innovation, these made the performance of Shenzhou Yuanwang products completely reached the leading-level in world’s lithium industry.

• Light weight: Make overall electrical power system weight and volume reduced by 10% - 48%.
• Quick responses: The new battery activated quickly, the supply is timely, synchronously starting with push motor, can start large torque motor or variable motor. Can start under the full pressure in cold state; Affordable 4-15 times the rated current instantaneous overload.
• Fast charge: New battery control circuit structure is simple and reliable, the charging time shorten 3-4 times than lead-acid battery, can change the past way of charging and discharging.
• High security: The new battery is a power gel electrolyte. Electric system is safe and reliable, power batteries does not exist in leakage and bubbles in the operation, package is soft aluminum casing, and thoroughly resolve the issue of battery explosion.
• High plasticity: New battery can be made into any shape in accordance with the vector space, and no performance reduction.
• Localization: All the raw materials and auxiliary materials of the new battery are domestic, can ensure quality and supply sources, fully compliance with the requirements of production localization. Compared with silver zinc battery, the energy density increased nearly 5 times, and discharge time increased 6 times.
• Environmental protection: Battery production completely in line with the state's environmental standards, is a green environment-friendly industrial projects.

1) Beijing Shenzhou Yuanwang company has built new polymer lithium battery production line, and has mass production ability. Various batteries performed excellent in test. In 2005, the products passed the test of General scientific research and experimental measurement equipment testing center, and the Ministry of Information Industry power lithium chemicals product quality supervision and inspection and test center. And access to the national defense communications network equipment into the network license at the same year. (At Attachment)

2) We have own R & D capabilities and some major equipment R & D team, can be continuously developing new products, keeping advantage.

3) We are the only one company who has the capability of the new power battery (hundreds or even thousands Ah), our products are demanded by many customers.

4) Huge market demand(In addition to military, the national grid substation, wind power stations, railway systems, electrical locomotives, the vital departments standby power supply, large-scale buildings, etc.)

5) Technologies and products in the world leading level.

6) Meet the environmentally-friendly, resource-saving and clean energy-the demands of modern society and policy requirements.

7)Economic effect and social effect are remarkable.

• The lithium-ion battery application was rapidly developed over the last decade. With the application of new materials, lithium-ion batteries are developing in the direction of the high-performance, low-cost and more safety. The application fields are from the information industry to the energy, communications, space from space to underwater power. Battery industry is an important component of new energy field and has become a new hotspot in the global economic development. In the next few years, the demand of electric car (such as medical electric cars, electric trains, electric cars, electric buses) will form a huge market.

（1）Civilian Power Battery

A. Power Field: China suffered unprecedented snow disaster in 2008, causing huge losses to China’s industry, agriculture, transportation and people’s life. If the powerful lithium-ion battery produced by Shenzhou Yuanwang were deployed in key positions, such as cabless communication towers, high voltage cables, meteorological stations, hospitals, and in the relief period, it should have played an unimaginable role. At present, Shenzhou Yuanwang is negotiating with relevant parties about this business. If high voltage cable and cabless comunication stations of major communication corporations (Net Communication, Union Communication, China Mobile) could install such powerful lithium-ion battery, this would be an extremely big market.

B. Transportation Field: First should be car. Currently, gas exhaust of cars over the world has caused unrecoverable losses to the natural environment and every country invests great research and development efforts into clear energy. During China Olympics, clear energy cars made by China have seen their preliminary success. Electric Bicycle is a practical vehicle with many advantages between automotive and non-automotive. Other clear energy vehicle such as electric scooter and train have become an irreversible trend. An electric scooter producer in Yangzhou, Jiangsu needs 80,000 100Ah lithium-ion power battery annually at present (8 per scooter). If daily production is 2,000 100Ah middle lithium-ion power batteries and annual production is 600,000 (290 business days per year), then the output value is RMB 1,740,000,000.

C. Other Fields: Up to date, diversified electric power equipment (such as medical equipment) are still using traditional lead-acid battery and few nickel cadmium and nickel-metal hydride batteries. Comparing with lithium-ion battery, traditional battery has lower working voltage, shorter working time, smaller power, shorter cycle life, higher self-discharge rate and heavier weight, which haven’t been overcome. Shenzhou Yuanwang has the dedication and ability to develop and produce these civilian products in scale and plans to have the civilian products account for 60-70% of the total production within three to five years.

• In many of our military equipment being developed, the new lithium battery-will greatly reduce the weight and increase payload and improve application performance. Special (non-standard) power batteries is mainly used in power energy propulsion systems Such as electric ships, submarines, torpedoes and mines long voyage, frogmen conveyer, and underwater combat platforms, such as unmanned aerial vehicles driving force.
• Special (non-standard) batteries are separated into reserve power battery and power-type batteries .The requirements for the power of islands and highlands, deserts, frontier areas of the three north the mobile communications is unlike other regions, and mainly focused on temperature, humidity, a the requirement of the discharge time. High energy density ratio medium-sized battery is the best choice, this battery can also be used for frontier coastal defense troops as the portable power for the insulation clothing.
• Sehnzhou Yuanwang company is currently cooperating with military for a number of equipment trials, the trials progressed smoothly, the military units gave high valuation to the products, "the China Science and Technology Daily," "Liberation Army Daily" has reported. (See Attachment).

Note: “Special batteries” means “military batteries”.

• 3.1 Financing Plan
• Beijing Shenzhou Yuanwang Science and Technology Co., Ltd. has the willing of introducing this high technology industrialization project. The project financing will be 230 million RMB for the construction of production base and D&R center. At the same time, invest fund for the development of new market and products, and mass production.

。

• Specific financing method: Investor provides fund to acquire the entire land, real estate and all shares (to be consultations) belongs to Beijing Fuyuan company together with Shenzhou Yuanwang company. For grasp the direction of the development of the new company and the direction of science research, and for improve the production and marketing, Shenzhou Yuanwang will hold 51% shares in the new company, and serve as chairman. However, the allocation with the investor could be 40:60 (that is, investor 60%), and in the first 2 or 3 years, Shenzhou Yuanwang company may not participate the profit distribution, all the profit use for the investor’s recovery (if use this approach, investor’s distribution after recovery will be 50%).

Shenzhou Yuanwang

Investors

1； Acquire the assets and shares of Beijing Fuyuan company (to be consultations).

2； Set up a Ah new lithium-ion polymer battery production line which the Capacity is 30 million.

3； The acquisition, development and production of equipment and testing equipment

4； Transform and construct plant, warehouse and protection facility to meet the special requirements of the products.

5； Market development, marketing and sales.

6； Build first-rate lithium-ion battery R & D institutions, maintain the leading momentum.

7； Recruit outstanding technical, management and marketing personnel.

8； Declaration of intellectual property rights, make industry technical standards.

9； Raw materials, auxiliary materials purchasing.

10； The compensation may occurred by the termination with the original collaborators .

11； Liquidity and R & D funds.

The detail of the total investment plan will be listed in financial plan. (Please see the annex)

5.1 Strategic Objectives

Short term objective：

Take the new company who has completed the financing as basis, investor and us will complete the rebuilt of the production basis together and start trial production within 1 year. At the same time, complete the rebuilt of the R&D center, and continue the development of the super polymer lithium-ion battery which has greater capacity, to meet the market demand, and keep the leading position in the industry.

Medium and Long term objective：

Takeing Shenzhou Yuanwang polymer lithium-ion battery industrial base, advanced products and market share as basis, integrating the advantage of technology, resource market and continuing R&D, keep the market share and corresponding capacity growing, and finally complete listing within 5 years after the industrial base completed.

6.1 Short Term Profit Model

Continue the production and sale of the existing products. Build the foundation for the future listing. The revenue in the production base building period will be 20 million RMB each year.

• 6.2 Medium and Long Term Profit Model

After the production base is completed, the annual capacity will be 30 million Ah, estimate the price of power polymer lithium-ion battery as 30 RMB/Ah, the output value will be 0.9 billion, according to 50% discount there will be also 450 million RMB revenue. According to the shareholding by the two sides, if the market could meet the capacity, the investment could be recovered. If the market situation is good, we should actively preparing the second and third production line building.

• 6.3 Other profit model

With the new company product design and the production advantage, actively offer other paid services for users, particularly in the battery management system design, manufacturing design of a new electric vehicle battery power system design, should be able to become another complementary profitable field of the main products.

• 7.1 Technology competitor
• In energy battery (lithium) areas, the enterprises who can achieve single-chip 100 or close to 100 Ah include: Zhongxinmeng Guli, Tianjin Lishen and Suzhou Xingheng. From technical analysis, none of them could reach the level of Shenzhou Yuanwang product, and the gap is big. (the test report followed)
• At present time, in the lithium battery production domestic and abroad, only Shenzhou Yuanwang’s product can reach 300Ah/chip. Technically, other manufacturers can not catch up Shenzhou Yuanwang in the next few years, even reach the current level of Shenzhou Yuanwang is also difficult.

7.2 Commercial rivals

Domestically, the main competition is price, but when choosing market at strategic level, Shenzhou Yuanwang will avoid competition with other rivals in same field. The main products of Shenzhou Yuanwang are powerful lithium batteries for which there are no competitors in the market at present while such powerful batteries are extensively used.

In the foreign market, currently France, Japan and America has high power battery production. But few real significance of high power lithium battery.

• The investment situation of new polymer lithium-ion battery industrialization high technology project:
• 1. Total investment: 230 million RMB (2008-2009)
• Including: Acquire all the assets and (shares) of Beijing Fuyuan Company: 130 million RMB.
• Improve the basic construction of the original project: 6.38 million RMB
• Construction of factories: 10 million RMB
• The purchase of production equipment and auxiliary equipment: 37 million RMB
• R&D: 12 million RMB
• Liquidity: 30 million RMB
• New products market development: 4.62 million RMB
• After all the investment completed, we will get:

A high energy polymer lithium-ion battery production line which annual capacity is 30 million Ah

• Polymer lithium-ion battery R&D center
• A perfluorosulfonic acid ion-exchange membrane production line which the annual capacity is 30, 000 square meters (to be discussed）
• A proton exchange membrane fuel cells production line which the annual capacity is 1000KW (to be discussed)

• 1）Product price: >30 RMB/Ah
• 2）Output value: 900 million RMB/Year(30 million Ah/Year）
• 3）Inherent market: >10 million Ah/Year
• 4）Fixed cost: 45 million RMB/Year (5%)
• 5）Variable cost: <30% of the product price
• Operating cost
• Operating costs includes variable costs, fixed costs and depreciation of fixed assets.
• Variable cost: 100 thousand RMB/10Ah
• Variable cost includes raw materials, auxiliary materials, energy cost and sale cost.
• Fixed cost: No more than (5%) 45 million RMB/Year
• Fixed costs includes wages, insurance and management fees
• Depreciation of fixed assets: 10 million RMB/Year
• Fixed assets investment of 100 million RMB, the depreciation is 10 years, the annual depreciation is 10 million RMB.
• Products sale (stable operating period)
• PPI: 30 RMB/Ah
• Annual sales: 900 million RMB（30 million Ah×30 RMB）
• Annual pretax profit: 900 million RMB-355 million RMB=545 million RMB
• Annual net profit: 545 million RMB-tax
• Comprehensive tax rate at 15%, revenue 82 million RMB/Year, 545 million RMB-82 million RMB=463 million

（Tax: high-tech enterprises can enjoy the state's preferential tax policies）

• No. Project Area Unit Price Total Investment Amount Proportion
• 1; Fixed assets 18338.00
• 1.1 Acquisition of assets 13000.00
• 1.2 Rebuilt of the factories 1000.00
• 1.3 Production equipments 3700.00
• 1.4 Greening and public works 410.00
• 1.5 Public and office facilities 228.00
• 2; Intangible and deferred assets 1200.00
• 2.1 Land use rights
• 2.2 D&G 1200.00
• 2.3 Start up cost
• 3; Liquidity 3000.00
• 4; Market development 462.00
• 5; Total: 23000.00

9.1 Policy risk and response

This project is independent innovation hi-tech, and government support project, and there is no policy risk.

9.2 The risk at technology level and the response

Standard problem:

The current domestic lithium battery standard was test standard set in 1998 for small energy storage battery(2Ah), has been unable to meet the testing needs of Shenzhou Yuanwang polymer lithium battery. The new industry standard favorable to the enterprise need to be set and submitted for approval.

Equipment problem:

The Shenzhou Yuanwang polymer lithium battery is large power battery, just the width has beyond the limit of all the complete battery production equipment around world. Therefore, there is no equipment in the market can meet the needs of the mass production of large polymer lithium-ion battery. To change the production situation, we have to get the equipment designed by ourselves, and acquired from outsourcing processing.

• 1. Fuyuan Fuel Cell Company is a enterprise engaged in hi-tech industry
• Fuyuan Fuel Cell Corporate members include: Beijing Fuyuan Original Pioneers New Energy Materials Co., Ltd. and Beijing Century Fuyuan Fuel Cell Ltd., Ltd.
• The industry can cooperates with lithium-ion battery, mutual promotes and mutual develops
• At present, Fuyuan fuel cell industrialization base which built by Fuyuan Fuel Cell Company has completed. But the project failed to place the funds in banks, to make the project funding chain break off, the project stalled. Now, the company has stopped operating, as discussed by all the shareholders, they decided to sell the two companies of Fuyuan.
• 2. Fuyuan Company owns the nationally unique perfluorinated ion-exchange membrane production line
• 3. Fuyuan Company owns good land and housing assets
• An area of 34 acres, or 22,440 square meters. One technology office building (more than 6000 square meters), 2 workshops (more than 4000 square meters for each), a comprehensive building (2000 square meters), including: Warehouse, garage, center air conditioning room, distribution room, compressor room, reception, etc. Can be put into production with a little transformation.

• 1）Name: Beijing Century Fuyuan Fuel Cell Co., Ltd.
• Founding date: April 2000
• Registered capital: 70 million RMB
• The nature of enterprise: Beijing-Hong Kong cooperation
• Legal Representative: Chairman and CEO-Zhong Jialun
• Registered address: No. 15 Yuncheng Street, Economic Technology Development District, Beijing
• Main business: Proton exchange membrane fuel cell technology development, technical service; Proton exchange membrane fuel cell products, accessories production, and sales.
• Certification: 2001, certificated by Beijing Municipal Science and Technology Commission as hi-tech enterprises
• 2003 State Patent Office as "patent 100 enterprises"

• （2）Name: Beijing Fuyuan Pioneer New Energy Material Co., Ltd.
• Founding time: Sept. 2000
• Registered capital: 29.27 million RMB
• Nature of enterprise: Beijing-Hong Kong cooperation
• Legal representative: Chairman---Bian Jiang CEO---Zhang Jianguo
• Registered address: No. 15 YunCheng Street Economic Technology Development District, Beijing
• Main Business: Proton exchange membrane fuel cell technology development, technical service; Key material of proton exchange membrane fuel cell products production, and sales
• Certification: 2001, certificated by Beijing Municipal Science and Technology Commission as hi-tech enterprises
• 5 national ministries identified as national new key product
• Beijing Torch Plan
• 2002 Beijing Major scientific and technological achievements Transformation

（Next Page: Sheet 5-The needs of fund of the improvement of Fuyuan Company’s project)

Organizations and agencies design basis and principle

• Based on "Labor Law", "law of cooperation“ and "articles of association“, and take the principle of people-oriented, competent and efficient, set post with work and choose people with post.
• Flat even organization, easy for management and good for improve efficiency.

Company organization structure

• Company’s permanent organizations: Office, financial management department, HR department, Production management department, Marketing department, Sale and service department, QA department, technology committee (including D&A center, product designing department), Computer center, property management department, etc.
• When all the projects are finished, the stuff number will not more than 150. Of which, 40 managers, 15-20 D&G members, the rest is production line workers.

• When the financing of this project is finished and production start, the company will be a polymer lithium-ion battery technology D&G center and Production center with a leading position in China and even globe. And company will be listed within 3 years after production start.
• The withdraw plan and accrual plan designed for investor:
• Listed abroad of in China
• Shareholder can sell shares to get money
• Shareholder can draw dividends from company

• Has rich knowledge of polymer lithium-ion battery and relevant new energy field
• Abundant and stable fund strength
• Good capital operating ability
• Seek for long term development in polymer lithium-ion battery market
• The initial financing plan for this project is industrial investment, the financing amount is 230 million RMB. According to the analysis of the cash flow of the project in the next 6 years, the current value of the total cash flow is 1.2 billion RMB, we believe the investor can get reasonable economic profit
• When the cooperation start, investor can withdraw in the ways listed below to ensure the safety.

• It is difficult to provide the relevant material to investor, because of the polymer lithium-ion battery produced by Shenzhou Yuanwang Company is military using; That will ask for frank and sincere communication, when we get good progress in negotiation, we can sign NDA or investment intention statement; At that time, Shenzhou Yuanwang Company can provide investor with these material:
• 1；” Non-patented technology property assessment report” made by Beijing Dingjunxingye Assessment Company in July 2007. (Shenzhou Yuanwang wanted to get the patented technology and orders from military be assessed again, but did not approved by the parties concerned)
• 2；Shenzhou Yuanwang Company gained ”Product entered permit” promulgated by People's Liberation Army General Equipment Department communication department.
• 3；Certification files of product orders promulgated by relevant units.
• 4；The verification report of Shenzhou Yuanwang Company products promulgated by the relevant authority verification insititution
• 5；Demonstration of Part of Shenzhou Yuanwang Company products which have passed verification and in mass production.

• In summary, the implementation of the projects Conforms to the Chinese relevant law and the related industrial policy. The need of market is obvious. The project has comparatively monopoly benefit and comparatively long economic benefit for investors. The economic and social effects generated are also obvious. The commercial value is tremendous.
• Attachment——（ Polymer lithium-ion battery production equipment list）