(Yicai) May 14 -- Shares of Xiasha Precision Manufacturing rose after the maker of car gears said it would spend up to USD15 million on establishing a plant in Vietnam to respond to international demand and policy changes.

Xiasha [SHE: 001306] was trading 3 percent higher at CNY59.62 (USD8) as of 1.39 p.m. after surging as much as 7 percent in Shenzhen earlier today.

The firm intends to set up a project company in the southeast city of Thu Dau Mot to be in charge of building and operating the factory that can make one million sets of precision transmission parts per year, the Ningbo-based enterprise announced yesterday without disclosing the exact type of products. Construction is slated to begin in August and operations are scheduled to start in February.

The move should help Xiasha expand its supply capacity overseas to meet international customers' demand while more flexibly responding to macroeconomic changes and industrial policy adjustments and reducing the potential adverse impact of changes in global trade, it added.

Xiasha's precision transmission parts are mainly used in cars, robots, electric tools, and medical equipment. Revenue from the auto gears business made up over 60 percent of the total last year, and the firm earned 15 percent of its income abroad, according to the annual report.

Xiasha counts Bosch, Japan's Nidec, Makita, as well as Germany's Schaeffler as some of its renowned clients abroad. The firm's products also entered the supplier systems of Canada's Magna International, Germany's ZF Friedrichshafen, Zurich-based ABB, and Panasonic, per the annual report.

Editor: Emmi Laine