Thank you for standing by. This is the conference operator. Welcome to the Graphjet Technology Business Update call. Today's call is being recorded, and we have allocated one hour for prepared remarks and Q&A. I would now like to turn the conference over to Ashish Gupta, Investor Relations. Thank you. You may begin.
Thank you, Operator, and welcome to everyone joining us on the call. Today, we are very excited to announce the commissioning of Graphjet's first commercial-scale manufacturing plant located in the Subang District in Malaysia. Joining the call today from Graphjet Technology are CEO and co-founder Aiden Lee. To start, Aiden will provide an overview of this major development, its strategic importance, other significant milestones the team has accomplished, and the long-term market opportunity for graphite, graphene, and Graphjet. Aiden will then discuss the financial implications of the business moving forward. Finally, Aiden will conclude with a discussion of Graphjet's differentiated technology. After the presentations, we will open the floor to your questions.
Ahead of this call, Graphjet issued press releases, which we will refer to today. These can be found on the Investor Relations section of our website at www.graphjettech.com.
Please note, on this call, we will be making forward-looking statements based on current expectations and assumptions, which are subject to risks and uncertainties. These statements reflect our views as of today, should not be relied upon as representative about views of any subsequent date, and we undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements in light of new information or future events. These statements are subject to a variety of risks and uncertainties that could cause actual results to differ materially from expectations. For further discussion on the material risks and other important factors that could affect our financial results, please refer to our filings with the SEC, including our 10-Q filed on August 12, 2024. With that, I would like to turn the call over to Aiden Lee. Aiden, please go ahead.
Thank you, Ashish, and good morning to everyone on the call. We appreciate you taking the time to join us today. We are excited to discuss our recent announcement that we have officially opened commercial operation at the world's first commercial-scale green graphite facility located in the Subang District in Malaysia. This achievement marks a monumental step towards the execution of our strategy and vision to become reliable suppliers of green graphite to the electric vehicles market. I would like to start by expressing my gratitude to our employees. Targeting such a massive market opportunity requires a highly skilled and dedicated team, and their commitment is critical to our success. Notably, this facility is the world's first commercial-scale plant capable of recycling palm kernel shells, a highly abundant agricultural waste byproduct in Malaysia.
To produce battery-grade graphite, the new facility has the capacity to recycle up to 9,000 metric tons of palm kernel shell annually to produce up to 3,000 metric tons of graphite per year. This level of production is sufficient to support battery production of approximately 40,000 electric vehicles per year, providing us with unparalleled abilities to meet the robust EV-driven demand that we are seeing for graphite. I'm pleased to report that we have received our first shipment of palm kernel shells and have begun shipping green graphite product samples to our customers. Additionally, we plan to produce hard carbon at the plant to provide feedstock for our planned green graphite facility in Nevada. With a footprint exceeding 91,000 sq ft, the plant will support a local workforce of 200 jobs, underscoring our commitment to job creation and economic growth.
Before delving into our recent announcement in more detail, I would like to provide an overview of Graphjet Technology for those who are new to our company. In 2019, my three co-founders and I set out to establish Graphjet Technology, the world's first and only direct agricultural waste-to-graphite technology developer and producer for the electric vehicle industry. We were united by the common mission of manufacturing clean and guaranteed-strengthened sustainable graphene and graphite using agricultural waste as a feedstock. Our leadership team brings together diverse expertise that has been crucial to realizing this vision.
I bring over 10 years of experience in engineering, construction, development, telecommunication, energy, and utility industries. Having managed multi-billion high-value listings in China, Hong Kong, and Malaysia, our executive director, Mr. Aw Jeen Rong , contributed valuable experience in business development and has been instrumental in expanding our group business across various industries.
Our Head of Research and Chief Scientific Officer, Mr. Liu Yu, provided critical technical leadership with his vast knowledge in biodiesels, base oil, and heavy oil, along with numerous patents and utility innovations. Mr. Liu Yu was promoted to Chief Operating Officer (COO) on December 2, 2024, and now holds both COO and CSO positions. He will be responsible for overseeing both CSM production and operation, including all technical and customer support functions. Two core opportunities serve as catalysts for Graphjet's founding. First, as the electric vehicle revolution and the green energy transition were gaining global momentum, we recognize that graphite, a key material used to make lithium-ion batteries for EVs, will become of critical and strategic importance in the coming years. As we will discuss in more detail, graphite is actually more important than lithium itself inside of a lithium-ion battery.
Second, in my home country, Malaysia, the second-largest palm oil producer in the world, we identify an underutilized opportunity to capitalize on byproducts associated with palm oil production. Specifically, we identify over five million tons of palm kernel waste, representing a resource with significant untapped potential. Driven by the convergence of these two core trends, Graphjet was founded with a mission to produce graphite that can fuel the energy transition and rapid expansion of the EV markets, all while utilizing a widely abundant waste product. This approach not only promises substantial reduction in our carbon footprint and cost but also positions us at the forefront of shaping the future of clean energy. In March, we were thrilled to achieve the milestone of listing on NASDAQ, leading the charge for other Malaysian companies seeking global recognition.
Our decision to list on the NASDAQ was a strategic one, aligning with our long-term expansion plan in the U.S. market. Becoming a publicly listed firm in the U.S. on the NASDAQ not only enhanced our visibility but also increased our exposure to key stakeholders, further facilitating our growth trajectory. Returning to the commissioning of our facility, we are proud to highlight that this plant is the world's first commercial-scale facility dedicated to recycling palm kernel shells, a highly abundant agricultural waste byproduct in Malaysia, to produce battery-grade graphite. This initiative aligns with our goals of bringing commercial production online as quickly as possible to meet the surging demand for graphite, particularly in light of China's recent export restrictions and the U.S. implementation of tariffs on materials from China.
This facility demonstrates our ability to leverage our technology at scale, and with Graphjet now commercial, we are on a path to begin generating revenue. We have already begun shipping product samples to our customers. It will also establish a strong foundation for our successful launch in the United States, as we intend to produce hard carbon at the plant and pr ovide feedstock for our planned green graphite facility in Nevada. All of this underscores the potential of green graphite production outside of China to deliver significant benefits to automakers and battery manufacturers. With Graphjet now officially in commercial production, we are excited to support the clean energy transition with our environmentally friendly and cost-effective processes and technology. We are pioneers in this field and believe that there are currently no direct comparables.
Finally, it is important to note that the facility will provide meaningful benefits to the local economy. With a footprint exceeding 91,000 sq ft, the plant will support a local workforce of 200 jobs, underscoring our commitment to job creation and economic growth. We intend to further expand our production capacity in Malaysia with an additional facility in Kuantan District of Pahang State in 2026. Together, these two facilities will provide Graphjet with 13,000 metric tons of annual production capacity in Malaysia. Now, let me walk through what differentiates our technology and production process. Throughout the Graphjet process, our core differentiator is our proprietary catalyst formula, which enables us to cost-effectively produce graphite of the highest quality.
Our facility utilizes our commercially proven and patented guaranteed-strengthened sustainable and cost-effective technology to produce green graphite directly from palm kernel shells, offering significant cost and yield advantages relative to current production, which is dominated by China. In particular, our technology reduces our operational carbon footprint by up to 83% and reduces costs by up to 50% compared to traditional processes. Specifically, for every kilogram of graphite produced, Graphjet produces only 2.95 kilograms of CO2 emissions compared to 17 kilograms of CO2 emissions from synthetic graphite production in China.
Additionally, our unique combination of patented technology and raw material sourcing advantages provides us with an ability to achieve higher quality production compared to existing market suppliers. Utilizing palm kernel shells and abundant waste products, we are the first in the world to convert this raw material into battery-grade artificial graphite with our patented technology.
We strongly believe that graphite is just as important as lithium for the production of lithium-ion batteries, and as electric vehicles continue to proliferate, the demand for graphite will only rise. In fact, it is the largest material by volume and mass, and there is more than 10 times more graphite than lithium in a battery. Indeed, what many do not recognize is that EV battery anodes are mostly entirely comprised of graphite, while the cathode is where you find lithium, nickel, cobalt, and other materials. As a result, graphite comprises nearly half of the battery cell and nearly a third of the entire battery. This growing need underscores the importance of our technology in the coming months and years. With China historically dominating the industry, Graphjet plans to be the leading source of graphite and graphene for the U.S. market.
We are the first in the world to produce green graphite outside China and the only palm kernel shell biomass waste-based graphite producer in the world. Importantly, we do not use coal or petrochemicals in our production process. As noted earlier, we are truly a pioneer in this field with no direct comparables. In addition to commissioning our first commercial green graphite facility, we have achieved significant technological breakthroughs that validate our position as an industry leader.
Our artificial green graphite produced from palm-based biomass residues has been tested by an authoritative third-party lab in China, resulting in a purity level of 99.99% and graphitization levels of 98.8%, both of which exceed the standard of high quality of graphite. This result strongly validates our technology's suitability for producing semiconductors and anode materials for high-performance electric vehicle batteries.
The high graphitization level is particularly significant as it indicates that the composition of graphite lattice is highly organized and of a uniform crystal structure, resulting in improved physical and chemical characteristics. This quality of graphite is particularly valuable for applications in lithium-ion batteries, thermal management, and graphite electrodes. We expect our high-performance artificial graphite will enable the market to foster breakthrough technologies and new applications, signifying a wider range of applications across this critical industry. Our innovative approach has earned recognition from leading global organizations, including the World Economic Forum and the International Innovation Awards. We are also proud participants in the prestigious MIT Industrial Liaison Program (ILP), further validating our position at the forefront of sustainable technology solutions.
We are also proud to announce that we have received three ISO certifications from ARES International for our manufacturing processes: ISO 14001:2015 for Environmental Management, ISO 9001:2015 for Quality Management, and ISO 45001:2018 for Health and Safety Management. These certifications demonstrate our commitment to operational excellence and sustainable practices. Furthermore, we have strengthened our intellectual property position with the award of a new patent in Malaysia for our unique palm-based graphene production process, the only patent of its kind in the country. Our technology delivers unprecedented environmental benefits.
Per kilogram of graphite produced, Graphjet generates only 2.95 kilograms of CO2 emissions compared to 16.8 kilograms and 17 kilograms from natural and synthetic graphite production in China, respectively. This represents an up to 83% reduction in carbon footprint compared to traditional processes, while also reducing costs by up to 80%. As mentioned, the world's graphite supply is currently controlled by China.
The region accounts for approximately 98% of global production, and it refines more than 90% of the world's graphite into a material that is used in virtually all EV battery anodes. That being said, China announced requires special export permits for three grades of graphite, expanding our total addressable market and posing a risk to the U.S. EV market's ability to secure reliable supply. With our facility now operational and shipping samples to customers, we are on a path to begin generating revenue. We are strategically positioned to tap into the beginning graphite market, which is projected to reach $25 billion by 2027. With continued growth expected well into the 2030s in the coming years, the U.S. government anticipates to enforce increasingly stringent requirements for sourcing critical minerals for battery components, including graphite, from outside China.
We are eager to align with U.S. policy and regulations to support the growth of the U.S. EV market. We currently have an off-take agreement with Toyoda and are working with some of the largest global battery suppliers to open a facility in Nevada that will supply graphite for large U.S. EV OEMs. We also have plans to build our first U.S. facility in Nevada, which will have the capacity to produce 10,000 tons of graphite per year, which is sufficient to power more than 100,000 EVs per year. Nevada is a strategic location for Graphjet, given its close proximity to a large number of EV battery manufacturers and automakers who will require substantial availability of graphite for future EV battery production.
We are targeting commissioning the first production at Nevada facility in 2026 by utilizing our Malaysian plant to process palm kernel shells into hard carbon, which can be then shipped to Nevada. We eliminate a conversion step in our production process, enabling our future Nevada facility to produce graphite more efficiently. In addition to graphite, we plan to produce graphene from graphite. Graphene is a high-profile revolutionary material known for its high conductivity, exceptional strength, and ultra-lightweight characteristics. It is also known as the "Black Gold" and the "King of New Materials." It is more than 100 times stronger than steel and five times lighter than aluminum.
Historically, the high cost of graphene was hindered by mass production adoption. However, graphene is a crucial component in energy storage systems, which are expected to grow steadily in line with the rise of clean infrastructures.
R&D into graphene is also advancing significantly, offering numerous emerging applications in the battery and semiconductor industries. Most notably, the aerospace sector could benefit from graphene applications once companies like ours manage to reduce its costs. With that, I will now turn to closing remarks. Thank you again for everyone who joined us on the call today. I also want to extend my gratitude to our employees whose dedication made today's announcement possible, as well as our investors for their continued support. As we look to capitalize on the robust near-term opportunities within the graphite market, as well as the sustainable long-term opportunities we see to cost-competitively manufacture graphene, we are energized by the possibilities that lie ahead.
More than half of the globe is in dire need of sustainable and reliable sources of this strategic material, and we are primed and ready to meet this need and pursue the immense number of opportunities for sustainably produced graphite and graphene to help create a more circular economy, and with that, I will ask the operator to open the line for a question. Thank you.
Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the Star keys. One moment, please, while we pull for questions. Thank you. Our first question comes from a line of Mike Shlisky with D.A. Davidson. Please proceed with your question.
Yes. Hello. Thank you for taking my questions. I've got one or two here I wanted to run through. First, regarding the Nevada facility, could you maybe share with us how far along you are at this point in building that facility? Do you have all the permits that you need, and are you expecting to receive any government subsidies to get that facility up and running?
Hi. Thank you for the question. Yeah. As for now, today, we are still working on Nevada state government right now. The bottom line is that we want to establish capacity that's close to our U.S. customers and to streamline customer support functions. And of course, we're still working with the state governments, going through the site selections, working with various consultants.
And of course, we have meetings internally with our committees, with our board of directors, to finalize all those proposals and strategies decisions to move on with the decisions with the team. Yep.
Great. Thanks for that. Can you also review, towards the end of your comments, you mentioned how the palm kernel shell would get to Nevada? Can you maybe go over that again? Did you explain that there will be some kind of intermediate product shipped from Malaysia to Nevada, or will the palm kernel shell waste product just be sent over directly to the U.S. from Malaysia?
Yeah. Thank you for that question. This is such a great question. Yeah. And looking at the current environmental regulations, is that in the U.S., we couldn't import the palm kernel shell or the so-called waste to the U.S. from Malaysia.
So what we can do is that we're going to refine at our current new plants in Malaysia's Subang districts to refine the palm kernel shell to hard carbon, and we're going to ship the hard carbon to the state, which is Nevada, hopefully, and to process and refine to become graphite and graphene. So it's an intermediate product that is permitted to be imported. Is that what you're trying to say there? No. We would like to import the hard carbon from Malaysia to the U.S., not the palm kernel shell.
Oh, okay. I gotcha.
Okay.
Excuse me. And then maybe one last question. If you could just share with us a little bit about the kinds of customers you're talking with to include your products in their batteries.
Maybe can you at least tell us, on a global scale, the types of countries in which these folks are coming from? Are you looking at Europe? Are you looking at elsewhere in Asia besides China? Just some thoughts as to where we should be looking for when we're going to see your first handful of partners.
Yeah. I think it's not the right place for me to disclose the potential customer's name right now until we finalize into a certain agreement arrangement with the customers. But if you're looking at the geographicals that we are currently looking at, it's that South Asia, Japan, all the battery automakers in Europe as well, some conglomerates from South Asia, those will be our focus for this year to get it done and to get the contract commercialized and all that.
Excellent. Thank you so much. I'll certainly be staying tuned. I'll pass it along.
Of course. Thank you.
Thank you. We have reached the end of the question-and-answer session, and with that, the conclusion of today's call. Thank you for your participation. You may disconnect your lines at this time.