KUALA LUMPUR - Graphjet Technology Sdn. Bhd. (NASDAQ:GTI), a company specializing in the production of graphite and graphene from agricultural waste, announced plans to establish a new graphite production facility in Nevada.
The facility, expected to begin operations in 2026, aims to recycle 30,000 metric tons of palm kernel shells annually, converting them into 10,000 metric tons of battery-grade artificial graphite. This output is projected to support the manufacturing of batteries for over 100,000 electric vehicles each year.
The Nevada plant, described as a pioneering venture in the United States, is part of Graphjet's strategy to meet the growing demand for materials essential to the electric vehicle battery ecosystem. The company's CEO, Aiden Lee, emphasized the strategic importance of Nevada due to its proximity to a large number of battery manufacturers and automotive OEMs. He also highlighted the expected creation of more than 500 high-skilled job opportunities in the region.
Graphjet's Malaysia facility, set to commence operations in the second quarter of 2024, will process palm kernel shells into hard carbon, which will be shipped to Nevada for graphite production. This integration is intended to streamline the production process and enable quicker output at the Nevada site.
The investment for the Nevada facility is estimated to be between $150 million and $200 million. Graphjet is currently evaluating financial and strategic options to fund the project. Additionally, the company is in discussions to secure offtake agreements for the graphite produced at the new facility.
Graphjet's technology is reported to have a lower carbon footprint compared to traditional graphite production methods, with only 2.95 CO2 emissions per kilogram of graphite, as opposed to 17 CO2 emissions for synthetic graphite produced in China and 9.2 CO2 emissions for natural graphite in Canada.
This announcement is based on a press release statement and contains forward-looking statements that involve risks and uncertainties. The actual future results of Graphjet's operations could differ materially from those anticipated in these forward-looking statements due to a variety of factors, including market changes, regulatory shifts, the need for additional capital, and the commercialization of the company's technology.
InvestingPro Insights
As Graphjet Technology Sdn. Bhd. (NASDAQ:GTI) gears up for a significant expansion with its new Nevada facility, the company's stock performance reflects the volatile journey typical of growth-oriented tech companies in the sector. Over the past week, GTI shares have seen a modest rebound with a 3.1% total return, suggesting a short-term positive sentiment among investors. However, a broader look at the company's performance reveals challenges, with a 1-month price total return at -5.79%, a 3-month return plummeting by -33.19%, and a 6-month return down by -31.21%. Year-to-date, the shares have struggled considerably, with a total return of -32.36%.
Despite these short-term hurdles, GTI's long-term vision could be of interest to investors who focus on the potential upside of the emerging electric vehicle battery market. The company's stock is currently trading at 54.64% of its 52-week high, which may indicate an opportunity for investors looking for an entry point in anticipation of the company's growth prospects. Moreover, with an average daily volume over the last three months of 0.07M USD, liquidity remains relatively stable.
Investors and analysts are also keeping a close eye on the upcoming earnings report, scheduled for May 29, 2024, which will provide further insights into the company's financial health and strategic progress.
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