(Yicai Global) July 26 -- Shares of Shida Shenghua Chemical Group jumped after the Chinese developer of battery materials said it will produce battery electrolyte products for South Korea's Enchem.

Shida Shenghua [SHA: 603026] closed up 4.3 percent today at CNY146.71 (USD21.70), following a gain of as much as 7.2 percent intraday. The stock has climbed about 73 percent since late April, when major market indexes bottomed out.

The pair has penned an original equipment manufacturing deal that will run through December 2025, the Shandong province-based firm said in a statement yesterday, without providing any financial details of any estimate of the quantities it must meet.

Enchem is already a major buyer of Shida Shenghua’s electrolyte component chemicals. The new agreement will extend the partnership to the downstream electrolyte business, helping the Chinese company to quickly expand its electrolyte production capacity, it said.

Shida Shenghua has been a major supplier of battery electrolyte component chemicals, but since the second half of last year, it has revealed ambitious plans to also become a major player in the downstream business. The company intends to build three large electrolyte production facilities to add a combined 700,000 tons of annual capacity.

Enchem is a big name in the new energy vehicles sector. Its products can be found in the electric cars of Volkswagen and Ford Motor. The Jecheon-based firm has plants in China, Poland, and the United States.

Editor: Emmi Laine, Xiao Yi