(Yicai Global) June 16 -- Shares of Capchem Technology advanced after the Chinese manufacturer of electrolytes for electric vehicle batteries said it plans to invest USD120 million to build a plant to produce chemicals for EV batteries in the United States.

Capchem [SHE: 300037] was trading up 4.9 percent at CNY51.22 (USD7.18) as of today’s lunch break, after earlier gaining as much as 7.4 percent.

The plant, located in the US state of Ohio, will be built in two stages, the first of which will cost USD75 million and be completed in three years, the Shenzhen-based company said in a statement late yesterday, without revealing any further details.

Building a plant in North America is an effective way for Capchem to serve local clients and consolidate and expand its position in the US market, the firm added, noting that it will use the experience from the success of its Polish plant to build and operate the one in the US.

The new plant will also help Capchem better compete in the international market, the company pointed out.

Ohio-based Ultium Cells, a joint venture between South Korea’s LG Energy Solution and US car giant General Motors, is one of Capchem’s core overseas clients. The pair signed a four-year lithium battery electrolyte supply contract worth USD367 million in March 2021. Ultium Cells specializes in manufacturing lithium batteries for EVs.

Capchem has lithium battery electrolyte and chemical components plants in China. In addition to the Polish plant that began production in April, the company is in the preparatory stage to build a lithium battery electrolyte plant in the Netherlands, a Capchem senior executive said in April.

Editor: Futura Costaglione