A rising leader in graphene manufacturing for EV battery application is partnering with a global leader in industrial and chemical supply to leverage well-established international supply chains to support the accelerating demand for EV batteries in Europe

Royal Oak, Michigan – January 14, 2022 – Graphex Group Limited (‘Graphex’ or the ‘Company’) (HKSE:6128)(OTCQX:GRFXY), a world leader in graphite, graphene technologies and products used in electric vehicle (EV) battery and energy storage production, has entered into an agreement with the German company Desatec GMBH(‘Desatec’), an associate member of the TESUCO Group of Companies and a leading supplier of certain industrial materials with a customer base that extends from Europe, North and South America to Asia. Under this agreement, Graphex and Desatec will jointly promote the processing and sale of graphite materials used in the production of battery anodes for electric vehicles (EVs) and to offer services utilizing Graphex’s technologies to downstream users to establish local manufacturing capabilities for graphite anode materials.

Across Europe, companies are ramping up capacity to produce battery cells for the EV sector. Over 20 European battery Gigafactory projects are in the pipeline, with an aggregate production capacity of almost 700 GWh. Desatec, in partnership with Graphex, intends to help support this Gigafactory growth through the provision of Lithium-Ion battery anode material.

“We’re proud to work with an experienced partner in Desatec,” said John DeMaio, CEO of Graphex Technologies LLC, the U.S. subsidiary of Graphex Group. “With Desatec’s over 50 years of successful experience, this alliance will be an important catalyst to the continued success of Graphex. Their well-established supply chain stretches across the globe, and we look forward to leveraging our shared connections and expertise.”

Desatec has operated globally as a leading supplier of Sodium Methylate to the biodiesel industry since 1969. Desatec has well-established international supply chains that will support and accelerate Graphex’s imminent expansion efforts and market reach. Desatec is positioned to leverage its longstanding relationships with regional industrial companies to both distribute Graphex’s products and develop ventures using Graphex’s technology for construction of European-based coated spherical graphite manufacturing plants. Desatec will have exclusive rights for product distribution and partnership development using Graphex’s technology in Germany, Portugal, Turkey and Saudi Arabia.

“Desatec and Graphex are a natural fit,” said Allan Caspi, Project Director of Desatec Graphite Division. “Our expertise in international supply chains as well as manufacturing, when paired with Graphex’s role in the EV battery market, are a recipe for success. This synergistic partnership will help both companies to continue to expand.”

“Our investment into environmentally friendly alternatives continues,” said Oliver Gennies, Managing Director of Desatec GMBH. “Now with the quickly expanding market for electric vehicle battery materials and grid energy storage solutions, reliable raw materials availability and supply chain have become more critical than ever. Our agreement with Graphex will assist us to support our clients better as we jointly enter a new era of growth for the mobility and energy storage sectors overall.”

Graphex has previously announced its formation of its US subsidiary, Graphex Technologies, LLC to establish a US-based sales and marketing presence that includes the formation of strategic alliances regarding the supply of spherical natural graphite, synthetic graphite and graphene-related products to EV battery manufacturers and automakers in North America.

The anode of a typical EV battery for a sedan-size automobile requires approximately 70kg of battery anode material (BAM) – a combination of natural and synthetic graphite. Through 2021, Graphex has manufactured and sold over 10,000 metric tons per annum of natural spherical graphite primarily to automakers and battery manufacturers in mainland China. This represents about 5% of the entire supply in China and places Graphex in the top 5 producers of spherical graphite in the world.

Over the next three years, Graphex plans to increase its production capacity to over 40,000 tons per annum in China. In addition, in 2022 Graphex expects to include synthetic graphite in its BAM offering and plans to expand its operations geographically to include North America and Europe.

“The projected exponential increase in EV production over the next year and decade has already created strain on the supply chains of key component materials, including the graphite required for battery anodes,” said DeMaio. “By offering the full spectrum of battery anode materials coupled with our plans to co-locate production facilities in-country near the battery manufacturers and automakers in the US, Europe and other regions, we can deliver a long-term stable supply of quality components that are integral to the EV ecosystem.”