Posco Chemical will invest 281 billion won ($240.8 million) to establish two battery material plants in China, its first overseas production base for the electric vehicle battery business, the firm said Wednesday.

The envisioned 30,000-ton cathode plant and a 30,000-ton precursor plant will add to an existing battery materials production base in the Chinese city of Tongxiang, established in August 2019 and jointly operated by steelmaker Posco and its local partner Huayou Cobalt.

Once completed in 2023, they will increase steelmaker Posco’s annual production capacity of cathodes and precursors in China to 35,000 tons for both -- enough to power 390,000 electric vehicles mounted with 60-kilowatt-hour battery packs, said Posco Chemical, an affiliate of Posco.

Of the total investment, 176.9 billion won is to be spent on the cathode plant, a project of Zhejiang Posco-Huayou New Energy, which is one of the two joint ventures formed by Posco and Huayou.

In exchange, Posco Chemical will obtain shares in the cathode joint venture, which will raise the total stake held by Posco Group to 60 percent.

The rest of Posco Chemical’s money will go into the precursor plant to be built by Zhejiang Huayou-Posco New Energy, the other joint venture. This will increase Posco Group’s combined stake in it to 40 percent.

According to data from SNE Research, Chinese players controlled 43 percent of the global electric vehicle battery market by market share last year. Posco Chemical generated 48 percent of its battery raw material sales in China.

“Posco Chemical will take preemptive actions on the fast-growing market and speed up its investments. By manufacturing both cathodes and anodes, Posco Chemical will create synergies and take a leading role in the value chain of the battery industry,” Posco Chemical CEO Min Kyung-joon said.

Posco Chemical, which aims to achieve cathode production capacity of 160,000 tons in South Korea and an additional 110,000 tons overseas by 2025, is considering a new office in Europe or the US.

Cathodes are one of the four key components of electric vehicle batteries, along with anodes, separators and electrolytes. Cathodes determine how powerful batteries can become. Precursors are raw materials required to manufacture cathodes.