Japanese lithium ion battery company bypasses Manitoba for Ontario

A Japanese company that had been kicking the tires on building a massive Manitoba factory to make components for lithium ion batteries has instead decided on an Ontario location.

Asahi Kasei announced it will build a $1.5-billion plant to service Honda Motor’s Alliston, Ont., facility. The company said support from the Ontario and federal governments “is expected”.”

Early this year, it was revealed Asahi Kasei representatives had made a handful of trips to Winnipeg, investigating a potential site for a similar plant.

In a release, Asahi Kasei said it has an agreement with Honda Motor Co., Ltd. and the two companies are discussing the possibility of a joint venture. It also said a newly created subsidiary that will be formed to operate the facility will receive investment funds from the Development Bank of Japan.

The Ontario battery component plant will be part of a $15-billion Honda project, which includes a retooled vehicle assembly plant for electric vehicles, an electric vehicle battery plant nearby, as well as the Asahi Kasei plant and another battery parts facility that would produce cathode active material.

Honda is expected to receive about $5 billion in support from the federal and Ontario governments for the project that is expected to create 1,000 new jobs.

The fact the battery component operation is associated with an automobile manufacturing plant may provide some rationale as to why Manitoba missed out. But it doesn’t make it any less disappointing.

As to the kind of incentives that may have been offered, Winnipeg Mayor Scott Gillingham said Friday: “We’ll continue, as I said, to focus on creating the kind of environment here in Winnipeg that attracts investment and encourages investment … We’re focused on creating the environment to attract investment.”

One industry source familiar with the company’s inquiries in Manitoba said the announced development in Ontario is more comprehensive than what had been proposed in Winnipeg.

The province, the city and Economic Development Winnipeg tout green energy, reliable workforce and availability of critical minerals in Manitoba as attractions for electric vehicle battery manufacturers keen to establish a North American supply chain.

Ryan Kuffner, president and CEO of Economic Development Winnipeg, said: “We continue to field significant interest from potential investors in Winnipeg and Manitoba, predicated on the unique competitive advantages of our jurisdiction.”

Manitoba is home of one of only two producing lithium mines in the country, but that hasn’t yet provided enough of an attraction for major manufacturing.

The availability of a significant-sized pieces of land (something increasingly rare in many jurisdictions) and Manitoba Hydro’s green energy has also attracted the interest of two other groups investigating potential lithium processing facilities in Manitoba — all of which would require investments of $1 billion-plus.

— with files from Joyanne Pursaga, The Canadian Press

martin.cash@freepress.mb.ca