GEM Is A Gem In The Battery Recycling Industry That Was Inspired By A Toothpaste Experiment

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GEM Co., Ltd., which stands for “Green, Eco-manufacture,” has an interesting history. Today it is one of the largest battery recycling plants in China and has more than 10 years of experience in the industry. It’s had its up and downs, but through it all, it’s built a multi-directional and cross-regional battery waste recycling system.

I was actually looking at an initial news piece about the company’s latest investment when I stumbled onto an interview with its Chairman, Kaihua Xu, who wasn’t always an entrepreneur. He was previously an academic. It’s often small or mundane things that lead us on our paths in life, and for Xu, the success of an experiment with toothpaste was what inspired him to go in this direction.

How Toothpaste Led One Man Onto A Journey Into Battery Recycling

In a recent interview with Fastmarkets Industrial Minerals, GEM’s chairman, Kaihua Xu, spoke about the unlimited resources of recycling. The chairman has been focused on recycling in China since the mid-1990s and his company handles 10% of the recycling of electronic waste and 10% of discarded batteries in China. It also handles 5% of automobile recycling.

In this interview, he shared his story of how he got into recycling. As noted above, it started with toothpaste. He was studying at Central South University, a school that is well known for cultivating talents in metallurgy in China. Xu was researching the recycling of tin from toothpaste tubes as his college graduation project in 1985. I find this interesting because for as long as I can remember, we use plastic tubes for our toothpaste here.

“If I can extract tin from toothpaste tube wastes and produce the recycled tin into stannous sulfate, it will help to cut China’s dependence on imported cargoes,” Xu recalled.

This was during a time in which China relied on imports of stannous sulfate, a coloring pigment used in aluminum extrusion manufacturing. His project was successful and it inspired Xu to choose recycling as his academic direction.

GEM was the first company in China to adopt the idea of “resources are limited, recycling is unlimited,” and implemented urban mining. He shared the history of starting GEM and explained one of the reasons why GEM was founded in Shenzhen.

He noted that the city was a vibrant hub of consumer electronics in southern China and that it was a place where entrepreneurs could establish their business with minimal initial investments. This was due to the support of the local government.

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“The other driver for us to do green industry in Shenzhen was that the European Union introduced the Restriction of Hazardous Substances (RoHS) in electrical and electronic equipment,” Xu said. “That is also why the Shenzhen government supported us in the eco-industry because the city was the center for manufacturing consumer electronics.”

His interview is actually pretty moving and he shared some of the struggles his company has overcome while keeping the focus on recycling. There were some setbacks such as the pressures of capital flows, and at one time, the company could barely manage its operations. “Commercializing this technology needed a lot of investments. Besides, the business required a high occupation of capital, but the payment period for electronics manufacturers was quite long,” Xu said.

He also had two business partners who quit and was suddenly in a situation where he could barely afford the water and electricity fees for the operations or the employees’ salaries. However, he didn’t give up, and kept his focus on recycling.

“I had to stick to my initial aspiration. There needs to be someone who practiced those recycling innovations in manufacturing in order to solve the bottleneck of resources and the environment,” Xu said. “We were seeking light in the darkness.”

Things began to look up when he changed the direction of the business from lead-free solder manufacturing to battery recycling in 2003. He had to solve two problems. The first was to find a business pattern that could generate cash. The second was to find venture capital to invest in the operations. After this, the company began recycling nickel and cobalt from battery waste material which was priced at a low cost. The company then produced the material into a nickel and cobalt powder which had high values.

Since then, the company set up a business model and supply chain that enables it to stand up to the competition in light of the increasing number of recycling companies. Xu touched upon this as well. “Recycling is a business that can be dated back in ancient Chinese history. But why were there no notable recycling enterprises in China? It was because we did not find a business model that combines technology, management, and profit-making,” he said.

He pointed out that GEM’s focus has been on technology innovations, since you need advanced technology to recycle electronics. He added that his company has invested 2.5 billion yuan ($387.4 million) in research and development over the past five years.

The interview is rather inspiring — a story of how someone didn’t give up on their dreams and kept on going. You can read the full interview here.

GEM’s Recent News: Investing 1.8 billion RMB Into A Battery Recycling & Precursor Production Plant

Gem recently announced that it will invest 1.8 billion RMB ($278.9 million) into a new battery recycling and precursor production plant in the Jiangsu province, north of Shanghai, China. The new plant will process battery scrap and have an output of 30,000 tonnes of NMC/NCA precursor, which are types of common cathode materials.

The plant will also process 10,000 tonnes of cobalt tetroxide and 3,000 tonnes of lithium-phosphate material, which is a first for GEM. The capacity will be over 120,000 tonnes of material on a cell level if the production is fed entirely by scrap metal.

Construction on the precursor plant is planned sometime this month, with staged commissioning between June 2022 and December 2023. The new plants will help GEM stand out in Shanghai in the same manner it already has done in Wuhan. In Wuhan, it has the full ability to disassemble vehicles, grade and repurpose batteries, and then recycle the batteries.

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Johnna Crider

Johnna owns less than one share of $TSLA currently and supports Tesla's mission. She also gardens, collects interesting minerals and can be found on TikTok

Johnna Crider has 1996 posts and counting. See all posts by Johnna Crider