Global automotive supplier, Hanon Systems has announced the signing of an investment agreement with the Dalian municipal government in China for expanding its automotive compressor operations.

As per the agreement, the company has secured government support and permissions for the investment in the construction of a third plant in Dalian, which will increase the total site space to more than 105,000sqft.

A formal signing ceremony commemorated the agreement which was held in Dalian, Jinshui District. The ceremony was attended by Dalian plant leadership, the Dalian Development Administration Committee and Chinese government officials of the Economic and Technological Development Zone.

The ceremony was preceded by a memorandum of understanding (MOU), which was established in June at the World Economic Forum (WEF) between Hanon Systems and the Dalian Development Zone Investment Promotion Bureau.

"We are pleased to receive this formal approval to invest and expand our Dalian operations, which is critical to support our business growth with local China automakers and global vehicle manufacturers operating in China," said In-Young Lee, president and chief executive officer of Hanon Systems.

The Korean company established its China operations in 2004. The plant produces electric, and fixed and variable swashplate compressors for automotive applications. It first expanded its operations in 2011, and today produces 2.7 million compressors annually.