(Yicai) May 15 -- Rongtai Electric Material, a Chinese maker of mica composite materials, will build a CNY300 million (USD41 million) plant in Thailand to meet the demand for thermal control coming from global electric vehicle brands.

The factory is expected to be able to produce 18,000 tons of mica materials per year in addition to other related parts, the Zhejiang province-based firm announced yesterday. The construction period is two years.

Micas are aluminum silicate materials that are used in electrical appliances, makeup, and paint. In EVs, these minerals are used to prevent thermal runaway. The compound annual growth rate of such global demand is expected to be nearly 38 percent in the five years leading to 2027 and the market size is predicted to reach about CNY10.4 billion (USD1.4 billion), according to a research report by Frost & Sullivan.

Last year, Rongtai earned CNY575 million by selling insulation parts for EVs, or 72 percent of its total revenue, based on its annual report. Some of its renowned clients include Tesla, Volkswagen, BMW, Mercedes-Benz, and Volvo, as well as battery leader Contemporary Amperex Technology. Besides domestic factories, Rongtai already operates a plant in Vietnam.

Rongtai is benefiting from the EV boom as the company announced in December that it was chosen by a foreign EV brand to supply mica products to three new models, expecting to earn up to USD358 million in sales over five to eight years.

Rongtai [SHA: 603119] closed 0.2 percent higher at CNY24.97 (USD3.50) in Shanghai today.

Editor: Emmi Laine