Neo Performance Materials reposted this
As promised and following my previous post about Benchmark's attendance at the recent opening ceremony of Neo Performance Materials' rare-earth permanent #magnet (REPM) facility in #Estonia, the second operational REPM plant in Europe next to VACUUMSCHMELZE’s (VAC) plant in Germany, here are some takeaways from our interview with NEO CEO and President Rahim Suleman. ▶️ Despite the current tense geo-economic environment, characterised by China's REE and REPM export restrictions and REPMs being increasingly linked to #defence technologies, Rahim Suleman emphasised that NEO is not a geopolitical company. Therefore, NEO’s primary focus remains the #automotive industry rather than supplying defence industrial supply chains, contrary to other emerging REPM producers in the US. ▶️ As for NEO's European supply localisation strategy, with two operational facilities in Estonia, Suleman underlines that it is primarily driven by the need to serve NEO’s local automotive customer base, while believing in the need for “parallel supply chains and balanced co-dependence”, but not in ‘China decoupling’. This is illustrated by NEO’s global corporate footprint, both within and outside China, which began 30 years ago with the establishment of NEO. ▶️ NEO's automotive focus can be explained as e-mobility (EV motors) is the largest driver of REPM demand and will remain so in view of 2035 (see graph below), with Europe accounting for 19% of global REPM e-mobility demand after China this year. Although defence gets much traction lately, it is just a small demand driver. Interestingly, Rahim Suleman referred to other promising end-markets for REPMs in our conversation, such as data centres driven by the AI boom and robotics. In other words, the EV transition is not the sole determining factor for NEO’s business and future growth strategy. ▶️ While admitting China will likely remain the most cost-competitive global REPM producer, the cost premium of producing REPMs locally in Estonia vis-à-vis China is not overly punitive and does not meet the same level as seen with European battery supply chain localisation, according to Suleman. All of this coincides with the recent launch of our Q3 rare earths forecast, which includes profiles of magnet producers for the first time. 👉 Reach out to my colleagues Neha Mukherjee Evelyn Mengwei Zhou James Brooks and George I., all REE and REPM experts, if you want to learn more. 🙏 Thanks again to Vasileios Tsianos and Rahim Suleman for taking the time! Please find the link to the free-to-read and full interview in the comments. More conversations to come with industrial leaders. Michael J. Finch Amelia Hawney