Michigan firm gets $1 billion Chinese contract
Updated: 2015-03-27 05:03
By PAUL WELITZKIN in New York(China Daily USA)
A $1 billion contract between Hybrid Kinetic Group Ltd of China and XALT Energy LLC will mean the addition of 300 jobs at the XALT plant in Midland, Michigan. [Provided to China Daily]
The CEO of a Michigan-based lithium-ion battery maker hopes a $1 billion contract to supply a Chinese company will eventually produce more sales in China and Asia.
"I think this is just the beginning. This contract means we will be supplying thousands of buses with batteries. Of course, China has hundreds of thousands of buses. I think this will open up a huge market for us in China and Asia," Subhash Dhar, CEO of XALT energy LLC told China Daily on Thursday.
Earlier this week XALT said an agreement with the Hybrid Kinetic Group Ltd of China will mean the creation of 300 high-tech and manufacturing jobs in Midland, Michigan. Hiring has already started and 80 jobs are expected to be filled in April. Hybrid Kinetic leases electric buses to municipal transit companies in China and each will be outfitted with a high-performance XALT battery which recharges in less than 10 minutes.
China is taking steps to re-evaluate traditional transportation models that are based on the use of fossil fuels as it seeks to curb air pollution. This will create demand for electric buses in the country's large and medium-sized cities, as well as the batteries needed to power the buses.
"Electric buses can help reduce greenhouse gas emissions substantially in China," said Dhar. He said XALT also makes batteries for the marine industry and for utility usage in connecting to the grid. "We have previously sold our batteries in Europe and the Far East," he added.
The contact between XALT and Hybrid Kinetic highlights the growing economic relationship between China and Michigan. China is the state's third-largest export market after Canada and Mexico. In 2013, Michigan exports to China totaled more than $4.1 billion. Michigan has received more than $1 billion in Chinese foreign direct investment since 2000. More than 100 Chinese companies have invested in Michigan, many in the auto industry and some in real estate and information technology. Late last year Governor Rick Snyder wrapped up his fourth trade mission to China since assuming office in 2011.
XALT said it has invested more than $600 million in its fully-automated Lithium chemistry-based manufacturing plant in Midland in the middle of the state. The company, originally founded in 2009 as Dow-Kokam LLC, employs 130 people. In 2013, Dow Chemical Co, headquartered in Midland, sold its interest in Dow-Kokam to MBP Investors LLC, an affiliate of Townsend Ventures, which is a Maryland-based private investment concern.
XALT has received support from the US Department of Energy, the state of Michigan, the Michigan Economic Development Corporation and the city of Midland. The Hong Kong-listed Hybrid Kinetic Group has operations in Germany and Korea in addition to China and the US. The company was formerly known as Far East Golden Resources Group Ltd and changed its name to Hybrid Kinetic Group in 2010.
"XALT's high quality and cost competitive battery products fit very well with our group's strategy of launching all-electric public transit buses in large scale with our unique business model," Dr. Yung Yeung, chairman of HK Group, said in a statement. "This supply relationship is a fine example of Sino-American energy cooperation."
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