(Yicai Global) July 29 -- Shares in Jiahua Energy Chemical Industry advanced as much as 4.1 percent today after the Chinese chemicals firm said it will construct a third electronics-grade sulfuric acid production facility at a cost of CNY60 million (USD9.2 million) for use by German chemicals giant BASF.

Jiahua Energy’s stock price [SHA:600273] closed up 3.11 percent at CNY8.94 (USD1.40), giving it a market valuation of CNY12.8 billion (USD1.97 billion). Earlier in the day it had reached CNY9.03.

Jiahua Energy will rent the workshops and land to BASF and will also be a key raw material supplier, the Jiaxing, southeastern Zhejiang province said yesterday. The two parties have already partnered on the building of two other production lines in Jiaxing that are already in operation.

BASF’s new plant should be ready by 2023 and will more than double the firm’s sulfuric acid capacity in China, the Ludwigshafen-based company said.

This move is a strategic one to secure long-term supply of electronics-grade sulfuric acid to better serve the country’s fast-growing semiconductor industry, said BASF Vice President Jens Liebermann. “It will help to grow our local and international customer bases in China,” he added.

Editor: Kim Taylor