VARTA to expand production capacity for lithium-ion batteries

This that is a consequence of continued high customer demand in a market that is growing by more than 30% annually. This strong market growth is driven by the underlying trends towards miniaturisation of application devices, increasing connectivity and wireless devices, a press release reads. “We are at the start of an enormous boom from which we stand to greatly benefit. We are growing much faster than the market and, for this reason, we are expanding again our production capacities massively. As innovation leader, we have successful design-in projects with all leading premium headset manufacturers,” says Herbert Schein, CEO of VARTA AG. The capacity expansion requires an additional investment of around EUR 100 million (to manufacture an additional 40 million batteries per year). This investment is set to be financed by the cash flows from the operating activities and possibly from a capital increase via a book building process with institutional investors as well, which, depending on market conditions, could be conducted in the near future. The Group is targeting the global market leadership for lithium-ion batteries looking to gain a market share of around 50% in 2020. The original plan had been to expand the production capacity from around 50 million batteries in 2019 to around 60 million batteries in 2020. “The short and medium-term customer demand for lithium-ion batteries can be easily predicted. At the moment, we are recording a strong and steadily growing order backlog. It is necessary to expand production capacities further in order to continue to deliver the demand in the future,” adds Steffen Munz, CFO of VARTA AG.