(Yicai Global) June 17 -- Guangzhou Tinci Materials Technology will spend CNY1.6 billion (USD248 million) to build two new production lines to consolidate its leading position as a supplier of lithium battery electrolyte and cathode materials, the firm said today after markets closed.

Tinci will invest CNY1 billion (USD155 million) to construct a production line for lithium battery electrolytes in eastern Anhui province, with a designed annual capacity of 150,000 tons of liquid lithium hexafluorophosphate and 2,000 tons of lithium difluorophosphate, it said.

The project, which is expected to be up and running in 18 months, is likely to boost profits by CNY525 million (USD81.6 million) a year, it said. Lithium hexafluorophosphate is a primary material used to produce lithium battery electrolytes, and the production line will greatly improve the company's capacity in primary products, it added.

Tinci will also form a joint venture with partners in central Hubei province to set up an iron phosphate plant. With an investment of CNY604 million (USD94 million), construction is expected to be completed within 12 months and will produce 300,000 tons of the compound each year.

Tinci’s iron phosphate capacity is insufficient, the Guangzhou-based company said. The project will help guarantee supply of the key raw material used in iron phosphate lithium batteries. The JV, in which Tinci will hold a 65 percent stake, is expected to generate CNY124 million (USD19.2 million) in net profit a year on average.

The firm’s stock price [SHE:002709] closed up 2.95 percent at CNY90.70 (USD14.10) per share today.

Editor: Kim Taylor