(Yicai Global) March 15 -- Enjie New Material Technology, the world's largest maker of lithium-ion battery separators, plans to spend CNY1.1 billion (USD200 million) to further expand capacity amid surging demand.

The Zhuhai-based company intends to start work on the second phase of an expansion project in its hometown in China's southern Guangdong province, the firm's main shareholder Yunnan Energy New Material said in a statement yesterday.

The rapid development of the new energy vehicle sector has driven continuous growth in demand for separators, with the supply of mid-end and premium products falling short of demand, the statement added.

The worldwide market for separators, which are used during a li-ion battery's charging cycle, is forecast to grow at a compound annual growth rate of 18 percent from 2018 to 2022, according to a January research report published by Technavio.

Enjie New Material's new project will have four automated production lines, the statement said, without providing its total production capacity. The company signed the necessary paperwork with the municipal government's administrative committee of the Zhuhai Gaolan Port Economic Zone on March 13.

The firm's first expansion phase was completed at the end of last year and cost CNY2.36 billion. Each year it can produce 1 billion square meters of separators. Top lithium battery developers such as Samsung SDI, LG Chem, Contemporary Amperex Technology and BYD Auto are now customers of Enjie New Material.

Separators are one of the key components of lithium batteries. They separate the positive and negative electrodes and allow the ions to pass between. Their performance directly impacts battery capacity, circulation and safety.