(Yicai Global) Feb. 27 -- Lopal, a Chinese lubricant producer that has widened its product portfolio to include battery materials in recent years, will invest USD290 million to build a lithium iron phosphate factory in Indonesia.

The facility will be constructed in the Central Java province with an annual output of 120,000 tons of lithium iron phosphate, a cathode material, the Jiangsu province-based firm said in a statement recently.

The first phase of the project with a capacity of 30,000 tons will be ready by December. The remaining capacity of 90,000 tons should be added later based on market conditions.

Lopal's domestic battery clients, including Contemporary Amperex Technology, have started expanding overseas so the firm's new project should help meet client demand while accelerating its business development.

The move follows that of the firm's main client as Ningde-based battery giant CATL said in April that it intends to pour USD6 billion into building a comprehensive industrial base covering raw materials, lithium battery production, and battery recycling in Indonesia with local state-owned enterprises.

Lithium iron phosphate is the latest trend in new energy vehicle batteries as the material is more affordable but also safer and more sustainable than ternary cathode materials. However, few companies produce lithium iron phosphate abroad so Lopal is seizing market opportunities, it explained.

Despite the new investment, Lopal's stock price [SHA: 603906] dropped 1.3 percent to CNY23.66 (USD3.40).

Editor: Emmi Laine, Xiao Yi