Proposed construction of a 1.2 billion square meter annual capacity wet-process lithium battery separator (Phase II) project. Cangzhou Mingzhu continues to expand capacity.

On the evening of April 1, Cangzhou Mingzhu (002108) released an announcement. Its subsidiary, Cangzhou Mingzhu Lithium Battery Separator Co., Ltd. (hereinafter referred to as “Mingzhu Lithium Battery”), has reached an agreement with Cangzhou Mingchuang Lithium Battery Development Co., Ltd., a state-owned enterprise-backed company in Cangzhou. They plan to jointly invest in establishing a joint venture company in Cangzhou High-Tech Zone to carry out an annual production of 1.2 billion square meters of wet-process lithium battery separator project (Phase II).

According to the announcement, the total investment of the above project is RMB 1.8 billion, mainly to build four ultrathin wet-process separator production lines, supporting coating equipment, production plants, warehouses, office and supporting auxiliary facilities, as well as related auxiliary equipment for production, testing, environmental protection, safety, and so on. Under the agreement, Mingzhu Lithium Battery will contribute RMB 1.26 billion to the joint venture, with an equity stake of 70%.

As planned, the project company will sign equipment purchase contracts in early April 2026; it will complete land transfer via bidding/auction/listing (bidding, auction, and listing) and commence construction by the end of May; the main structure of the factory buildings will be completed by the end of April 2027; equipment commissioning will be completed by the end of December; and trial production will begin in January 2028.

In fact, the market already had expectations for investment in the above project. As early as July 2023, Cangzhou Mingzhu announced its plan to build an annual production of 1.2 billion square meters of wet-process lithium-ion battery separator project, with a total investment of RMB 3.5 billion. The project will be constructed in two phases: Phase I will involve an investment of RMB 1.7 billion and has a designed production capacity of 600 million square meters; the Phase II investment timeline will be determined separately based on actual circumstances. Currently, Phase I of the project is under implementation, in the equipment installation stage, and will proceed to the commissioning stage afterward.

Industry insiders said that since the second half of 2025, the recovery trend in the lithium battery industry has become evident, and the supply-demand balance for high-end separator capacity is extremely tight. Cangzhou Mingzhu stated that this Phase II project aims to expand the production capacity of wet-process lithium-ion battery separator products, further enhance the scale efficiencies and market share of separator products.

The company said that the reason for choosing to advance the project jointly with a local state-owned enterprise-backed company is that it can leverage local governments’ empowerment in lithium battery market resources to create favorable conditions for the project’s long-term development.

Cangzhou Mingzhu’s main products include PE pipes, BOPA films, and lithium-ion battery separators, among others. In the first three quarters of 2025, the sales volume of the company’s lithium-ion battery separator products was approximately 420 million square meters.

As one of the few separator production companies in China that simultaneously masters key processes and equipment technologies for dry-process, wet-process, and coated separators, Cangzhou Mingzhu has strong capabilities in equipment custom design, conversion/reengineering, and commissioning. The consistency of separator pore formation and the consistency of performance in both the longitudinal and transverse directions are both among the industry leaders.

As of now, the designed production capacity of Cangzhou Mingzhu’s lithium-ion battery separators that have been put into production is 740 million square meters. In addition, the company’s expansion projects for wet-process lithium-ion battery separators totaling 1.3 billion square meters are under construction. Dry-process lithium-ion battery separators of 300 million square meters are still under construction.

In February of this year, the matter concerning the change of control of Cangzhou Mingzhu was completed. Guangzhou Light Industry and Trade Group Co., Ltd. (hereinafter referred to as “Guangzhou Light Industry”) became the new controlling shareholder, and the Guangzhou Municipal SASAC is the company’s actual controller.

To seize industry opportunities and, at the same time, consolidate the controlling position of the newly appointed controlling shareholder, in March Cangzhou Mingzhu released a share placement (private placement) plan. It plans to issue shares to Guangzhou Light Industry to raise funds of no more than RMB 1.4 billion, to be used for replenishing working capital. Currently, the above matters are being advanced steadily.