AN international chemical company is to build a £20m plant manufacturing a key component of electric car batteries in the Tees Valley.

Mitsubishi Chemical Corporation expects the plant, on Lucite International’s Cassel Site, Billingham, near Stockton, to be operational by the end of next year.

It will make electrolyte, the active ingredient in lithiumion batteries used in electric and hybrid vehicles.

The firm, a sister company of Lucite International, would not disclose which vehicle manufacturers it expects to be working with.

But the plant is due to go live only months before Nissan expects the production of electric vehicle batteries to start at a new £220m plant in Sunderland.

Depending on demand for electric vehicles, Mitsubishi expects to create up to 24 direct jobs over the next five years, with more in related support services, such as transport, logistics and plant maintenance.

Subject to planning permission from Stockton Borough Council, building work on the will begin early in next year.

Ben Inoue, director of overseas projects, said: “The skills of the workforce on Teesside, plus the excellent infrastructure, were major factors in deciding where to make this strategic investment.”

Phil Bailey, Cassel site director at Lucite, said: “It is a very exciting development, showing the benefits of being part of one of the largest chemical groups in the world, and represents a major vote of confidence in the skills and experience available on Teesside.”

The investment is supported by a £250,000 grant from One North East and the UK Department for Business Innovation and Skills, through the £60m Tees Valley Industrial Programme fund.

One North East business finance manager, Ken Samson, said: “I am delighted that One North East has been able to play a role in securing this important investment. This is a good example of a small amount of Government support making a real difference.”

John Leer, head of inward investment at Tees Valley Unlimited, said: “Mitsubishi’s decision to invest is really good news.”

Thornaby-based K Home International will design and build the factory which will produce 10,000 tonnes of electrolyte a year.

It comes as the North-East positions itself as a hub for electric vehicle expertise, with Nissan Leaf production in the region from 2013 destined to create thousands of jobs.

Nissan’s £220m battery plant, which starts production in 2012, will create 350 direct jobs.

The North-East, which is the UK’s economic area for lowcarbon vehicles, will also be home to a £8.4m national skills academy for sustainable manufacturing and 1,300 charging points are being installed.