JSE-listed Metair will deliver its first production lithium-ion batteries to a customer before the end of the year.
Metair is a distributor and retailer of energy storage solutions and automotive components.
Metair CEO Theo Loock said on Thursday that Prime Motors had secured its first order for renewable standby batteries for solar applications, noting that this would be the company’s first official entry into the lithium-ion market.
“We have done a lot of prototype and special project development but, in a continuous take-off supply situation for a long-term customer, this would be our first entry.”
In February, Metair acquired a 35% shareholding in Prime Motors, which is being geared to be Metair’s incubator and research and development centre for lithium-ion battery development.
Prime Motors has since secured a lithium-ion coating and cell assembly manufacturing line that will be installed in Metair’s Rombat facilities, in Romania.
Metair and Prime Motors are also involved in several lithium-ion projects with original-equipment manufacturers (vehicle manufacturers, or OEMs) that could spearhead Metair’s entrance into the lithium-ion automotive market.
“We are busy with quite a few prototype projects with our OEM customer base for next model development, so that would be in the next five to seven years,” said Loock.
“On the starter battery side, the challenge is the low temperature operation. The specifications are for these batteries to operate below –30 ˚C. That is quite a challenge. We made our first step to be able to operate at –18˚C, but to make the next step to –30˚C is a quite a big step.”
As far as lithium-ion batteries as vehicle energy sources were concerned, Loock said Metair was “working hard to secure a project with one of the major OEMs to see if we can supply an energy source development battery from our own facilities.
“Maybe we can be in a development project by the end of next year from an energy source supply point of view.”
Loock added that South Africa would be able to participate in the burgeoning lithium-ion market through its commodities, such as manganese and nickel.
Metair was working with South African aluminium supplier, Hulamin, on developing aluminium foil for lithium-ion batteries.
Metair on Thursday reported a 10% increase in group revenue, to R4.5-billion, for the six months ended June 30, while operating profit grew 16%, to R413-million.
Group operating margin improved from 8.7%, to 9.2%.
Efficiencies derived from production and labour stability, coupled with volume growth owing to higher levels of exports and use of more local (South African) components, saw Metair’s Automotive Components Vertical achieve a 12.5% rise in revenue to R2.2-billion, while profit before interest and taxes increased 31%, to R261-million.
The Energy Storage Vertical, despite being negatively impacted on by warmer winter conditions and foreign currency translations, increased revenue by 8%, to R2.66-billion, growing operating profit by 10%, to R250-million.
Mutlu Akü, Metair’s Turkish battery business, increased its automotive battery exports by 28% and local industrial battery sales by 83%, despite a tough economic and political environment.
“We have had a lot of focus to maintain our good performance in Turkey,” said Loock.
“South African companies have good experience in emerging markets, especially in weak and volatile currency environments. We know we must manage it. The only challenge would be if the currency volatility turns into a banking or liquidity crisis. Then it is a completely different ball game.”