(Yicai Global) June 17 -- Shares of Shida Shenghua Chemical Group rose after the Chinese chemicals company said it will spend a further CNY3.4 billion (USD503 million) building two more plants to make electrolytes used in car batteries.

Shida Shenghua [SHA: 603026] gained 3.6 percent to close at CNY148.85 (USD22.20). The shares are up by a quarter in value over the past 12 months.

The chemicals exporter will invest CNY1.2 billion in a new plant in the city of Wuhan, Hubei province, and CNY2.2 billion in another at Meishan, Sichuan province, it said in a statement yesterday.

The Shandong province-based company got into the electrolytes field for the first time last November with a plan to invest CNY1.6 billion building a production base in its hometown of Dongying, with an annual capacity of 300,000 tons.

The latest projects are a natural extension of Shida Shenghua’s main business, electrolyte component production, it said. Expanding downstream should give full play to the firm’s resource advantages in raw materials and improve the added value of its products, it added. 

The two new plants are each expected to generate and additional CNY6.4 billion in revenue per year. The Wuhan facility should see annual net profit of CNY272 million (USD40.6 million) and the Meishan plant CNY614 million. 

Each project will be able to make 200,000 tons of electrolytes a year. Meishan will produce two kinds of electrolyte solvents. Wuhan should be completed in October next year, while Meishan should be finished by the December.

Editor: Emmi Laine, Xiao Yi