(Yicai) May 21 -- Putailai New Energy Technology, the world's leading producer of lithium battery separators, said it plans to spend CNY5.6 billion (USD823.3 million) to lift its capacity to make separator film so as to narrow a bottleneck.

Putailai will build 16 lithium production lines for battery separator film in Qionglai in China's southwestern Sichuan province, with a total annual production capacity of 7.2 billion square meters, the Shanghai-based company announced late yesterday. The construction is planned in two phases. 

Phase I will include eight production lines with a total annual output of 3.2 billion sqm, which will be built at Putailai's exciting factory and are scheduled to start trial production next year. The remaining lines will be built on newly acquired land during the second phase, with plans to go live in the first quarter of 2028. 

Films are a structural component of lithium battery separators and serve as a semi-finished product. Once coated with active chemical materials, they become the finished separator used in batteries.

Putailai is the world's top supplier of coated films for lithium batteries, processing 10.9 billion sqm last year, or about 35 percent of the global total. Its annual production capacity of coated films stood at 14 billion sqm as of the end of 2025, while that of base films was only 2.1 billion sqm.

The new project is intended to increase Putailai's self-sufficiency in base films, enabling integrated production to better meet demand and improve profitability, according to the company.

Capacity expansion is gaining pace at suppliers of lithium battery separators amid strong downstream demand. Earlier this month, Yunnan Energy New Material, also known as Semcorp, announced plans to co-build a lithium battery separator joint venture factory in Sichuan's Zigong with an annual output of 5 billion sqm, while Mingzhu Plastic said it will construct eight production lines in Guangzhou, with a total annual production capacity of 2.4 billion sqm.

Putailai’s shares [SHA: 603659] closed down 2.2 percent at CNY31.72 (USD4.66) each in Shanghai today amid a wider sell-off in China’s stock markets.

Editor: Martin Kadiev