(Yicai Global) Aug. 15 -- Shares of Contemporary Amperex Technology rose after the Chinese battery giant revealed plans to build a plant in Hungary, the firm’s second overseas, with a total investment of EUR7.3 billion (USD7.5 billion).

CATL [SHE: 300750] closed 2.8 percent up at CNY516.10 (USD76.24). The stock jumped as much as 4.2 percent in the morning.

The project, to be built on a 2.2 million square meter site in an economic development zone south of Debrecen, will be able to make 100 gigawatt hours of power battery cells a year, Ningde-based CATL said on Aug. 12. A local unit will be responsible for the project, including funding. Building work will begin this year and is expected to take no more than 64 months, CATL said.

CATL’s first overseas plant, a EUR1.8 billion facility in Germany, started construction in 2019 and recently received a production license for part of the project. The first power cell products are expected to roll off the production line by the end of this year. Once fully operational, it will have an annual capacity of 1.4 GWh.

CATL’s Hungarian plant is the largest greenfield investment ever made in the country and will help strengthen Hungary’s leading position in the power battery industry, CATL cited Péter Szijjártó, the nation’s foreign affairs and trade minister, as saying.

The plant will be close to the production bases of leading carmakers, including Mercedes-Benz, BMW, Stellantis, and Volkswagen, and will meet their needs for cell and module products, CATL added, noting that it will also help the company to respond to those needs in a more timely way.

Mercedes-Benz will be the first and biggest client of the new plant, CATL said, citing Markus Schäfer, who sits on the automaker’s board and is its chief technology officer in charge of research and development and procurement.

CATL said the company and its local partners intend to cooperate to promote the recycling and sustainable operation of the entire battery product value chain, with the possibility of building a battery materials plant.

Editor: Futura Costaglione