(Yicai) Dec. 20 -- Putailai New Energy Technology said it intends to appeal a decision by Swedish regulators to reject the Chinese company’s proposal to build at SEK15.7 billion (USD1.4 billion) battery materials factory in the Nordic country.

Putailai will pull its plan to set up a production base in Sundsvall with the capacity to turn out 100,000 tons of lithium-ion anode materials a year after it was turned down by a government agency, despite the Shanghai-based company proposing solutions, it said late yesterday.

Putailai said it will stay in contact with the Swedish authorities to explore other possibilities for continuing the project. The firm will also actively communicate with the plant’s intended clients to help them find alternative supplies and plans to go on working with clients to develop additional overseas production capacity, it said.

Putailai announced the plan in May last year. The facility was scheduled to begin operations next year and reach full-scale production by 2026 or early 2027 to meet the needs of European battery clients. It was designed to produce 100,000 tons of lithium-ion battery anode materials annually.

After starting its review process in June under Sweden’s Foreign Direct Investment Act, the Inspectorate of Strategic Products set additional requirements on the project firm's controlling rights, management structure, ownership of research and development achievements, and regulatory arrangements. These demands posed challenges to the facility's commercial viability and operations, Putailai said.

The FDI Act, which came into effect 12 months ago, established a broad screening process for foreign investments to protect national security, public safety, and public order. The act applies to various sectors, aiming to prevent investments that could pose risks in these areas.

Putailai can produce 150,000 tons of anode materials across its three domestic production bases. It is also constructing a new plant in China’s Sichuan province with a planned annual output of 280,000 tons. In the first half of this year, the firm delivered almost 67,000 tons of products.

Putailai's stock price [SHA: 603659] closed 1 percent higher at CNY17.20 (USD2.40) in Shanghai today. The shares have fallen 18 percent so far this year.

Over 40 percent of Putailai's 2023 revenue came from its anode materials business, while overseas markets accounted for about 15 percent of its total income, according to the company’s annual trading report.

Northvolt, a Swedish battery cell maker that filed for bankruptcy last month, was one of Putailai's long-term partners.

Editor: Emmi Laine