Wuxi Kailong Technology has signed a cooperation agreement with Denmark's LIQTECH Company in August collectively to invest 90 million yuan ($13.5 million) to set up a joint venture company manufacturing diesel particulate filter (DPF) products.

The agreement means that the world's most advanced silicon carbide particle capture technology will be transferred to Wuxi, strengthening the city's leading position in China's automobile tail gas treatment industry.

LIQTECH company is a world well-known supplier of SIC diesel particulate filters and water treatment systems. The company has been listed on the New York stock exchange since 2013 and has factories in Denmark and the United States. Its sales network covers every corner of the world.

LIQTECH sees huge market potential in China's diesel engine market because there are no companies manufacturing silicon carbide DPFs in China at present. LIQTECH has been keen to find a Chinese partner to help it fill this gap in the market.

According to the agreement, Kailong will be responsible for factory construction and day-to-day business operations, while LIQTECH will provide technical solutions. The first stage of the project will be completed before the end of 2017, with annual production capacity of 1 million liters. The second phase is scheduled to be completed by the end of 2018, which will raise capacity to 2 million liters.

Zang Zhicheng, president of Kailong, said that all domestic light and heavy diesel vehicles must comply with the State Five Emissions Standards from next year, putting higher requirements on automobile exhaust processing manufacturers. He believes that DPF technology is sure to help the company grow its market share, breaking the current monopoly held by foreign technology giants.