Mitsui & Co. will form a car battery partnership with Jianlong Group, spending some 4 billion yen (47.8 million dollars) to acquire an over 20% stake in the Chinese company's lithium-ion battery subsidiary.
Established in 1999, Jianlong Group -- officially Beijing Jianlong Heavy Industry Group Co. -- is China's biggest player in the shipbuilding and steel industries. It generated about 38 billion yuan (5.7 billion dollars) in sales in 2009.
Mitsui and Jianlong representatives are expected to sign the deal in China Thursday. It will be the first case of a Japanese company investing in a Chinese car battery manufacturer.
The deal will involve Mitsui helping Tianjin EV Energies Co. sell its batteries to Japanese automakers. The trading house will consider linking the firm with Japanese companies -- battery makers, for instance -- for a technological tie-up.
Tianjin EV Energies, set up in 2009, is building a factory that will be able to produce batteries for tens of thousands of vehicles per year.
China, the world's largest automobile market, is likely to become one of the world's biggest electric vehicle markets as well. This is because Beijing is considering spending 100 billion yuan by 2020 to boost the number of vehicles powered by new sources of energy -- chiefly, electric vehicles -- to 5 million to better protect the environment and nurture related businesses.
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