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"Lead-acid batteries are right here to remain," Ahila Krishnamoorthy, Daramic – Saurenergy

Highlights:

"Despite a technology change from conventional to electric vehicles, there will still be a need for lead-acid batteries."

"I understand that with many uncertainties, it is difficult to predict whether PLI alone will be enough to accelerate this (cell production) in India."

Despite the increasing accumulation of lithium-ion batteries, The next big thing in the field of battery storage is to be, the demand for lead-acid batteries is growing steadily, if not spectacularly. The 90-year-old US company Daramic is at the center of this change and is heavily involved in the industry. The company has been operating in India since 2008, where it has two manufacturing facilities, and is a trusted player to stakeholders in the battery space. It is the largest manufacturer of separators made of polyethylene (PE), but also the only manufacturer of separators based on phenolic resin for automotive, industrial and special applications in the lead-acid battery industry.

Ahila Krishnamoorthy, MD, Daramic India, expresses her confidence in the continued growth of lead-acid batteries in India and speaks to Saur Energy about their scope and potential. She also talks about how the company is also researching the lithium-ion battery space.

Q.1 The industry relies heavily on lithium-ion batteries. While Daramic is interested in lead-acid battery separators, do you have plans to explore the Li-ion battery space?

It is estimated that India's lithium-ion market will be around 50 GHz by 2025. However, there are many factors that will make this possible. To make this possible, among other things, the availability of raw materials in India, the ability to manufacture lithium-ion (Li-ion) cells, the infrastructure to charge the batteries, huge investments in the manufacture of batteries in India are required. While this can be achieved with various government initiatives and the support of private investors, lead-acid batteries are not going to go away.

Daramic is mainly used in lead-acid batteries, but in lithium-ion batteries we have extensive technologies that have been developed in other countries. The lead-acid batteries also provide electricity in electric cars to start the engine, lighting, ignition and power for ancillary equipment such as radio, music, VCD and DVD player.

Despite a technology shift from normal to electric vehicles, there will still be a need for lead-acid batteries. We don't see this demand slowing for us. We may have other specification requirements. But we will also meet this with separators, while battery manufacturers will also find ways to meet demand. Lead-acid batteries are here to stay.

However, we are also strongly represented in this area through Daramic's sister company Celgaurd, which manufactures lithium-ion battery separators. It is well known that the separator is an important component in Li-Ion batteries. If there is unexpected growth in India, we can meet the need for Li-ion separators and consider building a later facility in India. For now, we are only monitoring and studying the emerging market.

Q.2 In your opinion, how does the market for Li-ion batteries compare to lead-acid batteries? Which cities and federal states are driving demand?

So far it's not much in India, not very significant to mention. However, work is underway in various parts of India to assemble batteries from imported cells. Every country started like this. Other countries with a developed lithium-ion space made a similar transition. You didn't make room for lithium-ion batteries overnight. It took 20 years of research into lithium-ion batteries. If we talk about the US, for example, they started working on lithium-ion battery technology almost 20 years ago before battery production started in the US. When US manufacturing started, China pursued and acquired US companies. The entire sector began to open up, more jobs, technology transfer, among other things, began. So we are on the right track. Demand must also be created. Electric vehicles, for example, cost more than fuel-powered ones. The affordability of the population is not very high. Some may switch to EVs, but fully switching to EV is an idea that is not far-fetched. The supply chain is not yet developed. It's an ongoing process. We are currently only assembling here in India. I take about 5 – 10 years to get to this.

Q.3 But are you thinking about defining plans to move to this area in the long term?

At the moment we are manufacturing lead acid battery separators and selling to Exide, Amararaja and so on. Our expertise and skills can easily be shifted to lithium ion batteries if we decide to set up a factory in India.

Within Asahi Kasei, our parent organization, we are discussing how we can contribute and accelerate this development in India. We are examining the market to initially invest in the import of separators into the country and later to start a greenfield project to manufacture separators in India.

Q.4 Speaking of manufacturing in India, what changes do you expect the PLI program to bring to cell manufacturing?

It's a good initiative. It will help the companies that announce the start of production in India. However, today we export Li-ion cells from other countries and assemble them into batteries. According to the government initiative, PLI benefits can be accessed as soon as we produce here. So basically we have to produce and sell here in order to benefit from it. So there is no incentive to start a factory.

That would be the greatest incentive that is needed. Private investors are also looking to invest in India, but that too will not happen immediately. In my opinion, it is therefore difficult, with a lot of uncertainty, to predict whether PLI alone will be enough to accelerate this in India.

Q.5 What are some of the key policy regulation challenges?

I hope the relevant authorities are looking into all aspects to facilitate doing business in India. I am particularly impressed by Gujarat. The state has given us a lot of incentives, there are also simple businesses in the state. I definitely want other countries to follow the Gujarat model as well.

Q.6 What will be the general trends in storage space?

Energy storage (large capacities) – like ESS – are needed for countries like India, where population growth is not slowing down and people's energy needs are increasing. Rural areas are being electrified, leading to a greater dependency on the utility grid, which in the event of failure will require inverters at home and in the office. This space will remain as long as the equation for electrical demand and supply is out of whack.

Q.7 Have you doubled your production at the Gujarat plant in the past month? What are the future plans now?

Today what we produce is enough for the needs of Indian battery manufacturers, but by doubling production, we want to transform ourselves from an importer to a completely local supplier that can meet demand. Battery manufacturers have faced many logistical delays. So with our expansion we are targeting players who are currently importing. We can meet the demand. The lead-acid battery industry has a market of about $ 3 billion, so separators account for about 3-5% of the total cost, and we are a major supplier there. We have a market capitalization of more than 50%. Indian battery manufacturers don't have to go anywhere else. You can contact us for any of your separator needs. Our expansion can support the entire battery business in India.

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