(Yicai Global) Feb. 1 -- Shares of Yunnan Energy New Material soared after the Chinese company announced a USD310 million cooperation agreement with Celgard, a well-known American developer of lithium-ion battery isolation membrane technology.

Yunnan Energy [SHE: 002812] closed 2.6 percent higher today at CNY135.41 (USD21), after earlier gaining as much as 3.4 percent.

The two sides will jointly invest CNY2 billion (USD310 million) in southeast China’s Jiangxi province to build production lines with annual output of up to 1 billion square meters of dry-process lithium-ion battery separator, Yunnan Energy said in a statement late yesterday.

Dry-process lithium-ion battery separator is largely used in power batteries with lower energy density requirements. Global growth in new energy vehicle capacity and the rapid rise of the energy storage market bode well for this product, Yunnan Energy said, adding that the investment is important for the firm in terms of market expansion and enhancing its overall strength. 

According to the contract signed yesterday by the project company, Jiangxi Mingyang New Material Technology, with the government of Gao’an city in Jiangxi, the project will be implemented in two phases, with an investment of CNY1 billion in each. It is expected to be completed and put into operation in six years.

Jiangxi Mingyang is a newly registered wholly owned unit of Shanghai Energy New Materials Technology, in which Yunnan Energy owns just over 95 percent, the statement said.

Under a joint investment deal between Shanghai Energy and Polypore International, which controls Celgard, the two sides will raise their capital in Jiangxi Mingyang by a combined CNY1.4 billion. This will be done in two phases through Polypore’s Hong Kong unit, Yuxi city-based Yunnan Energy said in a statement. After the capital increase is completed, Shanghai Energy will own 51 percent of Jiangxi Mingyang, while Polypore Hong Kong will own the rest.

Jiangxi Mingyang will be authorized to use Celgard’s battery separator production technologies and will also be responsible for the construction and operation of the lithium-ion battery separator production lines, the statement added.

US-based Celgard specializes in coated and uncoated dry-process microporous membranes used as separators that are a major component of lithium-ion batteries. It is a wholly owned unit of Japan’s Asahi Kasei, according to its website.

Editor: Peter Thomas