The plant will make separators for lithium ion batteries and ceramic coating. Construction is expected to begin early next year in the southeastern city of Changzhou, with production starting in the second half of 2020, the company said.

SK Innovation currently runs a factory in South Korea that produces the materials, which ensure stability and bolster power output.

"The decision is to keep pace with global EV battery makers' capacity increases in China and Europe, and to cater to client demands for stable supplies," a company official said in a statement.

The announcement comes a week after SK Innovation, which owns South Korea's top refiner and a unit of the country's No.3 conglomerate, said it is considering building an electric vehicle battery plant in the United States.

In August, the firm said it planned to build an electric vehicle battery factory in China by 2019, under a joint venture with BAIC Motor and Beijing Electronics. It is also building a battery plant in Hungary.

(Reporting by Hyonhee Shin; Editing by Stephen Coates)

By Hyonhee Shin