(Yicai) Jan. 6 -- GEM, a Chinese producer of battery materials, will invest CNY2.1 billion (USD293.2 million) to expand its ternary precursors factory in Indonesia and establish a joint venture with EcoPro BM, a major cathode materials manufacturer in South Korea, to better serve overseas markets.

GEM, which owns upstream nickel ore processing assets in Indonesia, will increase the annual capacity of its high-nickel ternary precursor material plant in the Indonesia Morowali Industrial Park, Central Sulawesi, from 30,000 tons to 50,000 tons, the Shenzhen-based firm announced recently. Construction will take 24 months.

The project is expected to generate additional annual revenue of CNY4.5 billion for GEM, with a projected annual net profit after tax of CNY571 million (USD77.9 million) and an estimated payback period of 5.8 years.

GEM initiated the project in September 2023 with an investment of CNY1.1 billion. The factory has begun production with secured medium and long-term orders from global customers, the firm said.

The plant sources its raw materials from GEM's nickel laterite smelting project in the same industrial park, and its products are primarily sold to GEM's JV cathode material factory in South Korea, establishing a full industrial chain from nickel mining to cathodes. Precursors are essential materials in cathode production.

The Chinese firm is working to upgrade its downstream product supply chain in Indonesia. In a separate announcement the same day, GEM revealed plans to establish a JV factory with EcoPro BM to produce 50,000 tons of lithium battery cathode materials annually. The plant may eventually increase its annual capacity to 100,000 or even 200,000 tons with enhanced raw material supply.

The JV aims to help both companies form an alliance to upgrade the battery materials supply chain, promote related investment in Indonesia, and expand into global markets including South Korea, Southeast Asia, Europe, and the Americas, according to GEM.

GEM's stock price [SHE: 002340] rose 1.3 percent to CNY6.31 (US 90 cents) in Shenzhen today.

Editor: Emmi Laine