(Yicai Global) Aug. 25 -- XTC New Energy Materials, a Chinese battery materials supplier, will invest CNY2.4 billion (USD350.4 million) to build a new plant in southeastern China to meet the rapidly growing demand for cathode materials.

XTC will construct a factory in Ningde, the same location where battery giant Contemporary Amperex Technology is based, to have an added annual capacity of 70,000 tons of ternary cathode materials, the Xiamen-based firm said in a statement yesterday. The project is scheduled to be completed in August 2025.

After the plant is running at full speed, the company's annual capacity of ternary cathode materials in Ningde will expand significantly to 95,000 tons. XTC has factories in three other cities in Fujian province. 

The new project should ease the pressure of delivering orders while consolidating the company's leading position in the domestic market, XTC said. The firm's sales of ternary cathode materials in the first half of this year tallied just 21,500 tons, though it is an increase of 91 percent from a year ago, executives said on the Shanghai Stock Exchange's investor relations platform in July.

This is not the only avenue of expansion the firm is pursuing. Last September, XTC had announced a CNY10 billion (USD1.5 billion) expansion plan for cathode material in southwestern China's Sichuan province. The factory will eventually be able to make 60,000 tons of ternary cathode materials and 100,000 tons of lithium iron phosphates, another types of cathode material. The first phase of the project should be finished in 2024.

The latest plan failed to boost the firm's stock price. XTC's shares [SHA: 688778] fell 4.6 percent to close at CNY120.20 (USD17.50). The equity price is still almost 20 percent up this year.

Editor: Emmi Laine, Xiao Yi