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.

“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 since 1969 and has well-established international supply chains that will support and accelerate Graphex’s imminent expansion efforts and market reach.

“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.”

About Graphex Group

Graphex Group Limited has its principal offices and administers its office in Hong Kong and is focused on the development of technologies and products for the enhancement of renewable energy, particularly the enrichment of spherical graphite and graphene, key components for EV batteries, lithium-ion batteries and other use cases. With our current manufacturing facility in Heilongjiang Province, we are strategically located near one of the world’s largest supply of high-quality natural flake graphite mines for our raw material. Graphex Group is currently among the top suppliers of specialized spherical graphite to the EV and renewable energy industries. Graphex holds 23 patents in areas including products, production methods, machinery design and environmental protection.

About Desatec GmbH

Desatec was founded in Hamburg, Germany in 1969 and is an associate member of the TESUCO Group of Companies. Desatec’s roots were established within the Automotive Parts Supply market with strong relations having been maintained with the Automotive OEM producers and supply chain.

Desatec has continued to grow and is now one of the dominant suppliers in the Sodium methylate solution and powder markets and is an important supplier and sales partner particularly to the biodiesel industry. Desatec currently supplies both Sodium methylate solution and Sodium methylate powder to numerous customers in various industries and is well-established in the biodiesel industry as a reliable supplier of SMO/NM30.

Desatec’s worldwide customer base extends throughout Europe, Africa, Asia, and the Middle East.

Safe Harbor Statement

This press release is being made pursuant to, and in accordance with, Rule 135 under the Securities Act of 1933, as amended (the 'Securities Act'), and shall not constitute an offer to sell, or the solicitation of an offer to buy, any securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with the registration requirements of the Securities Act.

Statements about the Company's future expectations and all other statements in this press release other than historical facts, are 'forward-looking statements' within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term is defined in the Private Securities Litigation Reform Act of 1995. The Company intends that such forward-looking statements be subject to the safe harbors created thereby.

The above information contains information relating to the Company that is based on the beliefs of the Company and/or its management, as well as assumptions made by any information currently available to the Company or its management. When used in this document, the words 'anticipate,' 'estimate,' 'expect,' 'intend,' 'plans,' 'projects,' and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. Such statements reflect the current view of the Company regarding future events and are subject to certain risks, uncertainties and assumptions, including the risks and uncertainties noted. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove to be incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated, expected, intended or projected. In each instance, forward-looking information should be considered in light of the accompanying meaningful cautionary statements herein. Factors that could cause results to differ include, but are not limited to, successful performance of internal plans, the impact of competitive services and pricing and general economic risks and uncertainties.

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