Sanyo to build new lithium-ion battery plant

TOKYO (Reuters) - Sanyo Electric Co Ltd the world's largest maker of rechargeable batteries, said it plans to build a new lithium-ion battery plant in western Japan by early to mid 2009, in its latest step to focus resources on core operations.

Sanyo did not disclose the size of the investment in the plant, which would mainly make PC batteries, but the Nikkei business daily reported the Osaka-based company would spend about 20 billion yen ($190 million).

Sanyo is also building in Japan another lithium-ion battery plant, slated for completion by early to mid 2009.

The two factories would boost Sanyo's lithium-ion battery production capacity by 30 percent to about 90 million cells a month.

A typical PC battery pack is made up of several battery cells.

Sanyo, which competes with Sony Corp and Samsung SDI Co Ltd in lithium-ion batteries, targets solar battery cells and rechargeable batteries as its growth drivers, and it has earmarked 125 billion yen in capital spending for its rechargeable battery business for three years to March 2011.

Its lithium-ion batteries are used in four of every 10 mobile phones in the world.

Shares in Sanyo, which is restructuring with the help of shareholder Goldman Sachs were up 2.1 percent at 240 yen in morning trade on Thursday, outperforming the Tokyo stock market's electrical machinery index IELEC.which fell 0.7 percent.

($1=105.83 yen)

(Reporting by Taiga Uranaka and Kiyoshi Takenaka; Editing by Brent Kininmont)