Japan's Mitsui Chemicals said on Tuesday it and China Petroleum & Chemical Corp (Sinopec) have set up a 50-50 joint venture in China to build a plant that will make ethylene-propylene-diene terpolymer (EPT) for 2 billion yuan ($315 million).

The plant, to be located in China's Shanghai Chemical Industry Park, will have capacity to produce 75,000 tons of EPT a year, and is set to start commercial operations in the first quarter of 2014, Mitsui Chemicals said in a statement.

A sharp rise in demand for EPT has been projected in China due to a rapid expansion of auto industry and the development of infrastructure such as railways, Mitsui said.