(Yicai Global) Oct. 24 -- Chemical firm LG Chem has begun construction of its second China factory in the eastern city of Nanjing to start churning out electric car batteries next year.

LG Chem commenced the construction work yesterday at the Jiangning Binjiang Development Zone, local newspaper Nanjing Daily reported. The Seoul-based firm expects annual sales to reach CNY35 billion (USD5 billion) in 2020.

The company said in July it will invest USD2 billion in the project and that the production base will supply international carmakers such as Hyundai Motor, Volvo Cars, General Motors, Fiat Chrysler Automobiles and Groupe Renault with an annual output of 32 gigawatt hours in batteries.

LG Chem is very optimistic about the development prospects of China and Nanjing, Chief Executive Park Jin-Soo said, adding that the firm will aim to provide services for fast-growing power battery customers, and contribute to the sustainable and healthy development of Nanjing's economy.

The project will substantially improve and consolidate the local new energy vehicle industrial chain, and push forward related business development, said Zhang Jinghua, Nanjing's party secretary.

Editor: Emmi Laine