(Yicai Global) June 2 -- Chinese electric car battery maker Sunwoda Electronic is planning to step into the cylindrical lithium-ion battery business by building a CNY2.3 billion (USD343.8 million) plant in southwestern Zhejiang province.

A unit of Sunwoda will set up a project company in the city of Lanxi to overlook the construction of a high-performance cylindrical lithium-ion battery facility with an annual capacity of 310 million units, the Shenzhen-based firm said in a statement on May 31. The subsidiary will hold a stake of no less than 51 percent in the project company.

The plant is expected to kick off design, application for regulatory approval, and construction in August, Sunwoda added, noting that it shall begin operation in December next year.

The project mainly aims to explore new business opportunities and application scenarios in the product market, hike the company’s market share in the relevant market segments, and improve its overall profitability, Sundowa pointed out. The funds needed will be self-raised and will not impact the normal operation of the company, it said.

The news failed to boost Sunwoda’s shares [SHE: 300207] which were trading up 0.2 percent at CNY28.86 (USD4.31) as of today’s lunch break.

The 18650 cylindrical Li-ion cell was the first lithium-ion battery to be commercialized by Japanese conglomerate Sony in 1991. It is mainly used in the industrial and energy-storage sectors.

Sunwoda also announced on May 31 that its unit Xinzhiwang Electronics mulls signing an agreement with Jinwan district of Zhuhai city, Guangdong province, to invest about CNY1 billion to build a base, which will be mainly engaged in the research and development, production, testing, and sale of smart hardware.

In February, Sunwoda’s EV battery unit Sunwoda Electric Vehicle Battery raised about CNY2.4 billion in a pre-A fundraiser led by Chinese new energy vehicle startups Li Auto, Xpeng Motors, and Nio.

Founded in 1997, Sunwoda’s major business is the R&D and manufacturing of lithium-ion battery modules. The firm has been constantly expanding its power battery capacity since the beginning of this year, with the total value of the new projects exceeding CNY22 billion (USD3.3 billion).

Editor: Futura Costaglione