Building US Plant to Produce Cathode Materials for Lithium Ion Batteries in Cooperation with Toda Kogyo

March 19, 2010

ITOCHU Corporation (“ITOCHU”) and Toda Kogyo Corp. (based at Otake, Hiroshima; President: Toshiyuki Toda; “Toda Kogyo”) have concluded a basic agreement that aims to establish a joint venture to produce and market cathode materials, the main component of lithium ion batteries (LiB), in Battle Creek, Michigan, USA, and to establish Toda Kogyo’s wholly owned subsidiary company, Toda Advanced Materials, Inc. (“TAM”), a producer of precursor materials in Ontario, Canada, as a joint venture.

ITOCHU and Toda Kogyo will construct a new plant producing an advanced material cathode for a supply into LiB production where a major increase in demand is expected in the electric vehicle (EVs) and hybrid-electric vehicle (HEV) automobile sector both in US and in Europe. Construction of the new plant will commence in the spring of 2010, with operations commencing in 2011, planning to start shipment to LiB manufacturers in the US and Europe. This new joint venture in US will invest around US$70 million (approximately 7 billion yen) with a target production by 2015 to cover sufficient cathode materials for batteries of 80,000 EVs a year, while focusing on R&D for next generation cathode materials.

Toda Kogyo has been supplying their cathode materials for battery manufacturers in Japan and Asia as well as in the US and Europe. The company turned its focus to a US Department of Energy (DOE) program under the American Recovery and Reinvestment Act of 2009 that aims to subsidize manufacturers of LiB and high-performance battery components, which will be used in next-generation plug-in-HEV, EVs and large-scale stationary power sources. Toda America Incorporated (“TAI”), a Toda Kogyo subsidiary in the United States, applied to the DOE and obtained approval for a $35 million subsidy (50% of the total investment) in August 2009, and concluded an official agreement with the DOE in February 5, 2010. TAI was the only Japanese-affiliated company to be awarded the subsidy. TAI will also receive tax incentives (subsidies and reimbursements) from the State of Michigan and the City of Battle Creek, with subsidies totaling approximately $30 million.

In its Frontiere 2010 medium-term management plan, ITOCHU emphasizes environmental and new energy business, with particular focus on storage batteries. More specifically, ITOCHU is working to securing natural resources, developing systems to secure natural resources and their secondary uses, and formulating power storage and storage battery-related value chains that will contribute to building a society with smarter and more sustainable growth. These efforts include investing in Enerl, Inc., a US-based lithium ion battery-maker, and participating in a joint demonstration project for a low-carbon traffic system in Tsukuba City.

ITOCHU foresees high growth in the United States for LiB and has concluded a basic agreement with Toda Kogyo to work on production of cathode materials. The agreement will form TAI, a cathode manufacturing plant, and TAM, a precursor manufacturing facility for cathode material in Canada, also a subsidiary of Toda Kogyo, as two joint ventures between Itochu and Toda Kogyo. These two joint ventures will integrate their production systems, ranging from raw material procurement to cathode material production. ITOCHU and Toda Kogyo will assign corporate managers to both locations for smooth management of the joint venture over the two countries.

Major roles of each company
・Joint management: corporate policies, budget control, other important matters
・ITOCHU: procuring raw materials and facilities, marketing and distributing products
・Toda Kogyo: development, manufacturing and quality control

The LiB market is expected to expand sharply with the widespread adoption of EVs, as well as the demand for mobile phones and personal computers. The current annual global market for cathode materials is 30,000-40,000 tons, which is expected to grow to 100,000 tons by 2015. By building a US production base for the joint venture, ITOCHU in cooperation with Toda Kogyo will move into the growing US and European markets and expand its business into regions with growth potential in the coming years.

Joint Venture Overview

United States

Corporate name

Undecided (currently Toda America Inc.)
Head office Battle Creek, Michigan (planned)
Representative Undecided (currently Junichi Nakano from Toda Kogyo)
Established March 2010
Capital Undecided (currently US$2 million)
Total investment Approximately US$70 million
Investment ratio ITOCHU: 50%; Toda Kogyo: 50% (Toda Kogyo currently holds 100%)
Production items Nickel-based, tri-metal-based, and manganese-based cathode materials
Production capacity 4,000 tons/year
Production start January, 2011 (scheduled)


Corporate name Undecided (currently Toda Advanced Materials Inc.)
Head office Sarnia, Ontario
Representative Undecided (currently Junichi Nakano from Toda Kogyo)
Established March 2010
Capital Undecided (currently CAN$8 million)
Investment ratio ITOCHU: 50%; Toda Kogyo: 50% (Toda Kogyo currently holds 100%)
Production items Precursors for producing cathode materials
Production capacity 4,000 tons/year