By Kim Yoo-chul
Samsung SDI, a battery-making affiliate of Samsung Group, will build its first battery plant in the western Chinese city of Xian, the company said, Thursday.
The move is aimed at increasing its market share in the promising electric vehicle market.
The Samsung affiliate signed an agreement to establish a joint venture with Chinese auto parts maker Anqing Ring New Group and the government of Shaanxi province.
The project is expected to commence in April, SDI said in a statement.
The joint venture will invest up to $600 million over the next five years, though SDI declined to provide details of the breakdown of contributions by each party.
Advanced battery applications from the plant will be used for upcoming electric vehicles by leading automakers such as Ford, General Motors, Chrysler and BMW, according to an company spokesman.
He added the decision was aimed at bolstering its presence in the Chinese electric vehicle market, which is forecast to become one of the world’s largest in terms of market volume by 2020.
Since late 2012, Samsung SDI CEO Park Sang-jin and Samsung Corporate Office senior executive Kim Jong-jung have been consistent in lobbying top Chinese government officials to offer more administrative and financial backing for the plant, said Samsung.
“Because Beijing wants to develop the country’s western parts, the new battery plant will get more supports from the regional government. In return, Samsung will hire more,” said one Samsung official by telephone.
Samsung Electronics will operate its first memory chip plant in Xian from this year. It is investing as much as $7 billion for the chip plant.
Officials said the firm intends to develop Xian into a “Samsung complex” to house high tech centers and other manufacturing bases.