TOKYO - TOSHIBA Corp said on Wednesday it will build a new factory in Japan for eco-friendly batteries, eyeing a future rise in demand despite a recession that has led competitors to shelve investment plans.

Toshiba said it will spend 'several tens of billions of yen' for the plant, which is scheduled to come online in fall 2010. Ten billion yen is about US$110 million (S$159 million).

'Although the immediate economic conditions are tough, we expect the global demand for lithium-ion batteries for industrial and automotive applications will rise sharply, particularly after 2010,' said a Toshiba spokesman.

A number of Japanese companies including Toshiba's rival Sony Corp. have been shutting down plants and production to deal with the global economic downturn.

Toshiba announced a loss in the second quarter due to falling chip prices and a stronger yen. It has already decided to lower production of chips and is reportedly considering laying off workers.

Details about the planned battery factory and the investment are still being finalised but the field seems promising, the spokesman said.

'We estimate the global lithium-ion battery market will reach 1.7 trillion yen (S$27.5 billion) in 2015. We want to be in a position to take 10 per cent of that,' she said.

The planned factory is for the long-life, rapid-charge 'Super Charge ion Battery' or SCiB, a rechargeable battery that can last more than a decade.

Japanese and US automakers are racing to build electric cars powered entirely by batteries after the success of hybrids that switch between a battery and fuel. -- AFP