(Yicai Global) April 6 -- Innovation New Material Technology, China’s biggest aluminum alloy bar producer, is linking arms with Sweden’s Gränges Group, a leading supplier of rolled products for brazed aluminum heat exchangers, to build a factory that will make aluminum alloy parts to supply the new energy vehicle market.

The facility, which will be located in southwestern Yunnan province, will have an output of 320,000 tons of aluminum alloy materials a year, the eastern Shandong province-based firm said yesterday.

The plant is expected to generate an annual output value of CNY10 billion (USD1.5 billion) and provide 400 jobs in the local area, Wenshan News reported earlier.

The tie-up with Stockholm-based Gränges will help Innovation New Material enter the aluminum parts market for electric cars, improve its product portfolio and boost competitiveness, Innovation New Material said.

Innovation New Material and Gränges’ Shanghai unit have agreed to inject CNY290 million (USD42.1 million) into the joint venture that will construct and operate the new plant, raising its registered capital to CNY300 million, Innovation New Material said.

Upon completion of the transaction, Innovation New Material will hold a 51 percent stake, down from the original 100 percent, and Gränges will own the rest. No further details about the estimated investment amount nor the construction schedule were given.

Shares in Innovation New Material [SHA:600361], which only went public on the Shanghai stock exchange in November last year through a backdoor listing, were trading down 0.3 percent at CNY5.97 (USD0.87) as of 1.50 p.m. China time today. Earlier in the day they had edged up 1 percent.

Editor: Kim Taylor