(Yicai Global) June 25 -- Tiansheng New Materials and Spain's CAF Power & Automation, a rail transit equipment and accessories supplier, have agreed to set up a joint venture that will open the way for the Chinese company to grow its business in the rail transport sector.

Under their agreement, the pair will form a new company in Tiansheng New Materials' hometown of Changzhou in eastern Jiangsu province, the Chinese firm said in a statement yesterday. Tiansheng New Materials will invest CNY25.5 million (USD3.7 million) for a 51 percent stake in the JV, while CAF Power will contribute CNY24.5 million for the rest. The statement gave no other details.

Tiansheng New Materials is a plastics and rubber materials producer that entered the rail transport sector in 2017 through a joint venture with China Railway Hi-Tech Industry. It also develops and makes railroad vehicles. CAF Power develops systems for traction, control, communications and energy storage and is a leading maker of reliable railroad stock, the statement added.