Starlit inks JV with Guangdong Dynavolt Technologies

Following close on the heels of prime minister Narendra Modi’s visit to China to woo Chinese investments into the country, Delhi-NCR-based Starlit Power Systems inked a joint venture with a Chinese motorcycle and UPS battery manufacturer, Guangdong Dynavolt Technologies today.

Under the JV, Dynavolt will acquire 24 percent of fresh equity in Starlit with an infusion of RMB 5 million that will go towards procuring equipment.

The association will allow elbow room to Dynavolt to place one Chinese member in Starlit’s 6-member Board of Directors. The member will not, however, be involved in the day-to-day operations of the company and will be consulted on special resolutions while Dynavolt will hold exclusivity in the Indian market.  With over a dozen subsidiaries, Guangdong Dynavolt holds a market capitalisation of $ 1,470 million (Rs 8,800 crore) and is listed on the Shenzen Stock Exchange.

Starlit in turn is also listed on the Bombay Stock Exchange and has a turnover of around Rs 125 crore that will add Rs 70-80 crore from the new JV business by end FY’17.

The partnership will facilitate technology transfer from Dynavolt to Starlit and the manufacture of next generation batteries for two-wheelers, e-bikes, telecoms and UPS applications in India. These will be produced at Starlit’s existing Sohna manufacturing facility in Haryana.

In the first phase, small batteries will be produced for UPS and two-wheeler applications, Sachin Shridhar, founder and chairman, Starlit Group, said at the signing of the joint venture.  “On the knowledge sharing front, the joint venture will allow both countries’ engineers to get training and exchange expertise with each other. Chinese engineers will also be working with Indian operators on the processes adopted by large scale Chinese conglomerates.” The Indian supplier has achieved backward integration at its Sohna facility that means unlike other battery makers it does not have to outsource most of the raw materials but has its own in-house capability for refining and customising alloys and oxides.

In the second phase, the JV will open doors for bringing in packaged off-grid solar solutions to the Indian market.

Starlit is a producer of the Konstant brand of batteries for the replacement market in the Indian automotive sector in addition to catering to the requirements of the inverter, solar and e-rickshaw industries. It also does third party labelling for existing battery makers in the country.

Partner Dynavolt is the second largest motorcycle battery manufacturer in China and Shey Hong Ping, GM Operations Dynavolt, told Autocar Professional that they have already been exporting batteries to India to both bike manufacturers and battery makers from China. The JV with Starlit will allow them to manufacture in India to support the government’s make in India vision to its existing customer base more cost effectively and speedily.

Dynavolt claims it chose the Starlit Group as a partner as they have known each other since the last four years and share synergies in the product category. Besides, Starlit already had a battery plant and a large customer base that could be leveraged.

“With a good manufacturing facility at Starlit and access to technologies and markets with Dynavolt, we can produce the VRLA batteries which are in huge demand both in India and overseas. Both the companies share a good working relationship. At a production level, it allows us to introduce product ranges in VRLA, gel and nano-gel batteries which are the products of the future and are widely used in the overseas markets,” added Ping.

Furthermore, the Chinese battery manufacturer is a big exporter as well of its batteries to the US, Europe, Japan and Australia with 75 percent of its turnover accruing from these geographies. Leading bike brands like Harley-Davidson and BMW Motorrad are some of its customers in addition to Euro Bike, Panasonic, Bike Master and Euro Bond.

India, an export hub in the making
Plans are now underway to make India an export hub for supplying batteries to both USA and West Europe as they will be more cost effective from India and thereby opening more growth opportunities for both Starlit and Dynavolt.  

In addition, Dynavolt, which has interests in solar panel manufacturing, solar-based power packs and inverters, e-bikes and cars, plans to push this agenda forward in the second phase of the plant expansion in India around 6-8 months later. This includes offering packaged battery and solar panelled solutions customised for meeting the growing demand of the energy sector in a clean and green way. Dynavolt is also the sponsor of the German racing Team, Dynavolt Intact GP in the World Grand Prix Moto GP. 

The Sohna facility of Starlit is being ramped up for the small battery production with an additional 3,000 batteries to roll out daily on one assembly line. This will be in addition to the existing capacity of 20,000 bigger batteries that are produced at the plant. Excess built-up space will be utilised for the new products and further ramp-ups are expected to involve less investments as the necessary infrastructure related to charging, casting and pasting are in place.

A perspective on the Indian e-vehicle market constituting e-cycles, e-rickshaws, carts and electric cars indicates that it is all set to grow especially with the boost given to the electric mobility industry by the recently launched FAME India scheme.

Both the JV partners are bullish of battery operated vehicles eventually replacing diesel as a more economical and cleaner option. For instance, China currently has 25 crore electric vehicles. India also has an ambitious roadmap for the EV industry by 2020.

The National Electric Mobility Mission Plan (NEMMP) 2020 unveiled in 2013 by the Union Government projects EVs to constitute 6-7 million units of new vehicle sales annually with liquid fuel savings of 2.2 – 2.5 million tonnes by 2020. This would also lead to substantial lowering of vehicular emissions and decrease in carbon di-oxide emissions by 1.3 percent to 1.5 percent by that period.

As part of the NEMMP 2020, the FAME India scheme was formulated this year to push for a faster adoption and manufacturing of hybrid and electric vehicles (xEVs) in the country.

The scheme works towards achieving national fuel security, a globally competitive xEV eco-system and an affordable environment friendly transportation system for the future and offers subsidies on a slew of electric and hybrid vehicles to boost their growth.

Phase I of the scheme has kicked off from 1 April 2015 and will run till end of 2016-17 with an approved outlay of Rs 795 crore.

An important component of EVs is the battery mostly lithium ion batteries that is a cash cruncher. Interestingly, Dynavolt is setting up a large lithium ion factory in the Fujian province of China that is slated to go into production next May. It has four plants in China already.

Though Shridhar discounts exploring lithium ion battery manufacturing leveraging its partner’s technology in the immediate future, he agrees that these batteries will be imported from Dynavolt to cater to the fledgling needs of the Indian EV industry.  “Lithium ion involves setting up very large plants with lithium coming only from Chile, China and USA. So there is no other source for lithium.” But with this advanced battery, it is optimistic of tapping the electric car segment going forward.

At present, Starlit makes conventional flooded batteries where the battery is filled with acid, lead and distilled water. The Dynavolt battery has acid, lead and distilled water in the form of a gel inside the battery that reduces evaporation losses and makes the battery maintenance free. Shridhar says the batteries made at Sohna are also to a large extent maintenance-free but the new batteries will be a further improvement on them. They will also cut warranty by almost half to 1 percent, look slick and have a duration ranging from 12 months to 5 years.

Discussions with OE manufacturers are set to start soon for tying up for the new products. Immediate competitors are the Amaron and Exide batteries but Starlit claims that their new batteries will be a match for them as they will be turned out on high speed machines. Incidentally, almost 70 percent of the battery cost is incurred on inputs such as alloys, refined lead and oxides. Starlit hopes to be 5-7 percent less costly as it cannot load its brand premium initially unlike top competition.

The battery market in India is worth Rs 22,000-23,000 crore, with 35 percent market share held by Exide, Amaron and Luminous. All others constitute small players. While the market has been growing in double digits at 10-11 percent some segments like those catering to e-bikes, e-rickshaws and solar have recorded a faster growth while inverters have been more or less static. Going forward, with the push given to electric mobility and battery operated solutions, a steep rise is on the cards.

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