(Yicai Global) Dec. 16 -- Dongfang Electric Heating Technology plans to invest no less than CNY2 billion (USD287 million) to hike its capacity to produce a key material used in the outer cases of power batteries, with the aim of becoming the top firm in this niche market in China.

Dongfang Electric Heating will build a nickel-plated steel strips plant in Taixing, a county-level city in Taizhou, Jiangsu province, the electric heater maker said in a statement late yesterday. The project will begin construction next July at the latest, with an estimated duration of two years, it added.

The Zhenjiang-based company’s expansion plans come after it received orders since June for a total of 130,000 tons over a six-year period from two manufacturers of external cases for lithium cells.

The firm did not specify the new project’s production capacity, but given the plant’s expected minimum annual revenue of CNY816 million (USD117 million) and the product’s current market price of CNY22,000 (USD3,155) per ton, annual capacity should reach 37,000 tons, bringing the firm’s total to 60,000 tons.

Once the plant is completed, Dongfang Electric Heating will be the leading domestic producer of nickel-plated steel strips used in the outer shell of high-end lithium batteries, it added. The project will also boost the company’s earnings results and help its customers to replace the raw materials with localized ones.

Dongfang Electric Heating has another plant with an annual production capacity of 20,000 tons of nickel-plated steel strips that is nearly completed, a senior manager said in October. The facility is expected to increase output from the first half of next year and produce in full swing by the end of 2023, he added.

Shares of Dongfang Electric Heating [SHE: 300217] ended 1.3 percent down at CNY6.22 (89 US cents) today.

Editor: Futura Costaglione