TOKYO -- Japanese chemicals manufacturer Asahi Kasei will start making separators for lithium-ion batteries in China with a local partner, betting that fast-growing renewable energy in that market will fuel demand for storage units.

Asahi Kasei will team with Shanghai Energy New Materials Technology to build a factory in the southeast province of Jiangxi next year, President Hideki Kobori told a business briefing Friday. The Chinese partner -- the global leader in separators -- will take a 51% stake while Asahi Kasei will own the rest.

The new factory will produce low-cost separators for large storage systems starting in the first half of 2022, with plans to increase annual capacity from 100 million sq. meters initially to 1 billion sq. meters by 2028.

Shanghai Energy boasts strengths in cost-conscious production and local marketing while Asahi Kasei will offer the manufacturing technology of U.S. subsidiary Celgard, a specialist in separators for storage systems. The arrangement will enable the Japanese company to catch new trends in China, the world's biggest market, early and use that knowledge for product development.

Global separator shipments will jump to 6.1 billion sq. meters in 2026 from 4 billion sq. meters in 2020, Japan's Yano Research Institute projects. The market has been driven by demand among electric vehicle and electronic device industries. Increasing use of solar and wind energy is expected to fuel further expansion of the separator market.