(Yicai) Dec. 24 -- China's Yunnan Energy New Materials said its factory in Hungary has received an order for lithium battery separators worth as much as USD66.3 million from an overseas battery supplier and a HUF13.4 billion (USD33.7 million) subsidy from the Hungarian government.

Yunnan Energy’s unit Semcorp Hungary Korlátolt Felelősségű Társaság inked the supply deal with Ultium Cells, a battery joint venture of LG Energy Solutions and General Motors, its Yuxi-based parent company said late yesterday. Under the deal, sales will not exceed USD66.25 million over the next year, it added.

Ohio-based Ultium Cells, which mainly supplies GM's electric vehicle plants in North America, bought products from Yunnan Energy worth CNY13 million (USD1.8 million) in 2022 and CNY44 million (USD6 million) last year, the Chinese firm noted, without disclosing this year's figure.

The deal will beef up Yunnan Energy's ability to expand in the global market for lithium battery separators, strengthen its competitive advantage internationally, and is expected to positively impact its operating performance in 2025, according to the company.

In a separate announcement, Yunnan Energy said the Hungarian government gave a HUF13.4 billion cash subsidy to Semcorp Hungary, equal to about 0.9 percent of the unit’s audited net assets. The grant is based on the firm’s long-term asset investment in Hungary and is a one-time subsidy, it noted, without disclosing further details.

Yunnan Energy's plant in Debrecen has an annual production capacity of 400 million square meters and a total investment of EUR340 million (USD353 million). Its first production line began trial operations in July last year and it began mass deliveries to European clients at the start of this year. 

In June, Yunnan Energy said it would invest around EUR447 million to add 800 million sqm to the plant’s annual production capacity.

Shares of Yunnan Energy [SHE: 002812] closed 1.7 percent higher at CNY33.58 (USD4.60) apiece today. The broader Shenzhen market gained 1.3 percent. Yunnan Energy’s stock has fallen 41 percent since the end of last year.

Editor: Martin Kadiev