(Yicai Global) March 6 -- Capchem Technology Co., a Chinese electronic chemicals manufacturer, plans to jointly invest CNY350 million (USD55 million) with lithium battery supplier Eve Energy Co. to build a production line that makes chemicals for lithium batteries and semiconductors.

Capchem will ally with Eve Energy through the former's subsidiary in Jingmen in China's east-central Hubei province, it said yesterday. The plant will produce 20,000 tons of lithium-ion battery electrolyte and 50,000 tons of semiconductor chemicals a year.

Shenzhen-based Capchem expects the plant to have annual net profit of CNY130 million on revenue of CNY1.7 billion. Capchem will have an 80 percent stake, with Eve Energy holding the rest.

The Jingmen plant will go up in two phases. Construction of the first stage will cost CNY250 million and span two years. It is scheduled to open in the first quarter of 2020. Phase two will commence building work two years after phase one starts production. 

Capchem has built several plants in South and East China. The partnership with Eve Energy will help the firm establish a base in Central China, where it has had no production facilities. The tie-up will also place it closer to its markets and cut transport costs.