We see revenue tripling this year: Rajat Verma, Lohum Cleantech

Battery manufacturing and recycling startup Lohum Cleantech sees its revenue growing three times to over Rs 300 crore in the current financial year. In an exclusive interview with ETEnergyworld, Founder & CEO Rajat Verma says this growth rate is likely to continue for the next few years, while the company sets up two new facilities in Greater Noida and the US, on the back of improved business sentiment in the battery industry. Edited excerpts…

Can you help us understand the business of Lohum briefly?

Our journey started in 2017 when we evaluated the Lithium Battery and the EV ecosystem. Battery raw materials are very geo-strategic in nature. China has huge control over most of those geographies. Even the next step in raw material processing, which is known as refining, is almost entirely based in China. So how do the rest of the countries strategize in this space? This was the initial thought when we started the company and we were very clear in our desire to make a raw material play in this ecosystem. With a prior history in recycling, it seemed like an obvious way to start our raw material journey. The idea was to take spent batteries, extract materials from them by recycling, refine these raw materials and send them back into the battery industry. We want to become the largest producer of battery raw materials in a sustainable manner using recycling, reuse and low-carbon refining.

So how has the business grown over the past five years?

We have been building the company at a fairly aggressive pace. We have built three manufacturing units in Greater Noida in the last 4 years. One of them is the largest recycling facility in the country. The second one is a dismantling facility, where we dismantle all the spent lithium batteries. The third is a reassembly facility, where batteries which are still good after dismantling are repurposed back for various applications. We are now setting up the fourth unit in Greater Noida. We have been growing at a rate of three times year-on-year and expect to continue growing at that rate. We have been a profitable business for the last 3 years. The key products that we make are largely products used by battery and cell manufacturers. Our customers are mainly outside India and we largely export our products. We have customers in Europe, Korea and Southeast Asia.

What is the total capacity of these three existing facilities? How do you see the manufacturing capacity expanding over the next few years?

The recycling facility has a capacity of 10,000 tonnes per annum, which roughly translates to 2 GWh of material. The disassembly and the reassembly units are about 300 MWh each. We’ve already scouted a new facility in Greater Noida for immediate expansion. With that, we should be able to expand about three times our current capacity. Beyond this, our immediate target is to set up a facility in the United States for upstream capacities. That facility will work on the hub and spoke model where the US becomes a spoke feeding into the Indian hub. We expect that facility to come up in the next 6-9 months. The downstream capacity will be entirely in India, while the upstream capacity will be distributed in India, US, and over time will also be developed in Europe

What kind of revenues are you able to generate annually, and what is the funding requirement for the expansion you talked about?

We expect to triple our revenue this year, as compared to the last financial year’s revenue of around Rs 110 crore. We anticipate revenue to grow two-and-a-half times for the next couple of years. Almost 70 per cent of our revenue comes from the recycled material we produce, 20 per cent comes from repurposed batteries and the rest from others. Needless to say, capacity expansion requires funds and we are always speaking with investors. But at this stage, we are not actively looking for investments. We are sufficiently capitalized at present for the Indian and the US expansion. Maybe in the middle of next year, we will be reaching out to investors again for the next set of expansions. We have been profitable, and our internal accruals have also helped us fund ourselves.

Lohum recently partnered with Glencore to supply them with battery chemicals. What is the larger strategy here and are you looking at more such partnerships?

Glencore is one of our largest customers and they have signed a five-year contract with us. Their global presence and ties help in distributing our products. We continue working with other customers beyond Glencore. We have been very conscious about not supplying to China because that defeats the very purpose this company was started. We hope that more and more companies start making cells within India, and at some point in time, they eventually become our customers. We expect a series of these cell manufacturing facilities to be commissioned in the next 2 to 4 years, as current capacity starts getting commissioned in the country

What kind of companies are you serving currently?

The chemicals that we produce go largely to companies which use them for building cells that ultimately make it to the mobility market. The repurposed batteries may go to stationary storage companies.