(Yicai Global) July 31 -- Zhejiang Huazheng New Material Co. [SHA:603186] will branch out into the new energy material manufacturing business by establishing a lithium battery cell packaging material subsidiary.

The publicly traded company will set up the plant with a production capacity of around 5 million square meters of relevant packaging material in partnership with two individual investors, it said in a statement on July 28. The joint venture will have an initial registered capital of CNY60 million (USD8.9 million), of which CNY44 million, or 73.33 percent of the total equity, will be offered by the listed company.

With an initial investment of about CNY77 million, the annual production capacity of the plant is projected to be 2.5 million square meters of packaging aluminum-plastic film products for digital batteries and traction batteries respectively, per the statement. Construction of the plant will be completed in two years.

Of the steel, aluminum and plastic lithium cell packaging materials currently available in the market, aluminum-plastic film is best known for its light weight and flexible design, and has therefore been widely applied in smartphones, tablets, wearable devices and other consumer electronic products in recent years. Furthermore, it has also gained popularity among new energy vehicle producers and energy storage businesses.

Most aluminum-plastic film products in China are imported from foreign markets, exposing domestic lithium ion battery manufacturers to considerable cost pressure.