(Yicai) Jan. 3 -- Spanish transformer manufacturer Industrias Mecanoelectricas Fontecha Yebenes plans to establish a joint venture factory with Chinese partner Yangdian Science & Technology to increase production of components used in solar farms, railways, and heavy machinery.

Yangdian has signed a shareholder agreement with IMEFY to establish the JV, the Taizhou-based company announced yesterday. Yangdian will hold a 51 percent controlling stake, with IMEFY owning the remaining 49 percent.

Within five and a half years of obtaining the necessary technical and operational qualifications, the JV aims to produce 10,000 oil-immersed transformers and 10,000 transformer cores. The products will primarily be purchased by IMEFY and sold to third parties in overseas markets under its brand name.

Yangdian will provide leased facilities and key components to the JV, while also assisting with local raw material procurement. IMEFY will contribute its intellectual property regarding products and their components to the venture and Yangdian.

The partnership is expected to strengthen IMEFY's position in European power equipment markets, and help Yangdian to venture into overseas markets, according to the announcement. The Toledo-based company sells transformers throughout most European countries.

Yangdian's current operations are primarily focused on the domestic market. In 2023, its transformer business generated over 90 percent of operating income, with overseas sales accounting for only 3 percent of revenue.

The partnership announcement failed to boost Yangdian's stock price amid a lackluster day for growth stocks in Shenzhen. Yangdian's shares [SHE: 301012] closed down 6.1 percent at CNY23.60 (USD3.20) while the ChiNext Index fell 2.2 percent to its lowest point in more than three months.

Editor: Emmi Laine