(Yicai Global) June 21 -- Construction of a lithium-ion battery separator plant, in which a joint venture between Chinese power battery giant Contemporary Amperex Technology and lithium battery separator supplier Yunnan Energy New Materials invested CNY5.2 billion (USD770 million), will be completed by next year.

The JV will build the factory in Xiamen, about 350 kilometers from Ningde, where CATL is headquartered, Yunnan Energy said late yesterday, adding that it will be partially put into operation as soon as next year.

The plant will have 16 Li-ion battery separator production lines, with the products to be mainly applied to new energy vehicle and energy storage power battery systems, the Yunnan province-based company noted.

Yunnan Energy announced the set up of the JV in November last year. It said at the time that it would own a 51 percent stake in the JV factory, with CATL holding the remaining 49 percent. The project will have an annual production capacity of 1.6 billion square meters of wet process separator products, with CATL as main client, it added, without revealing the location of the plant and the investment amount.

The statement released last year also mentioned that the JV was planning to build a dry process separator plant with an annual capacity of two billion sqm in collaboration with Jiangxi Enpo New Materials, a unit of Yunnan Energy. However, the company did not disclose any detail about the progress of this factory yesterday.

The cost of a lithium battery separator accounts for about one-third of the total. Separators can be produced through wet or dry processes. With the market share of ternary lithium battery increasing in recent years, the production ratio of wet process separators is also rising.

Shares of Yunnan Energy [SHE: 002812] were trading up 2.9 percent at CNY249.19 (USD37.26) as of today’s lunch break. CATL [SHE: 300750] fell 0.1 percent to CNY505.99.

Editor: Futura Costaglione