Freudenberg Group is expanding its healthcare business in China as the sector takes off.

The family-owned German conglomerate is involved in a diverse range of industries, including automobile parts, textiles, building materials, telecommunications and healthcare.

Max Kley, chief executive officer of Freudenberg Medical Group, an arm of the parent company, confirmed that the Shenzhen medical plant would be upgraded and expanded.

This will be part of a 1.2 billion yuan ($176.4 million) investment here.

"The medical industry is one of the key sectors identified in the 'China Manufacturing 2025' initiative launched by the government," Kley said in Shanghai. "We are in a good position to support China as it works to upgrade its medical industry."

The expansion of the company's Shenzhen plant includes adding 600 square meters of clean rooms in which to conduct thermoplastic precision molding and silicone precision molding.

"These are a critical part of Freudenberg's medical portfolio businesses," Kley said.

New equipment will extend molding tonnage capacity to 280 metric tons and enable production of larger medical device parts, according to Terry To, general manager of Freudenberg Medical Asia.

China's aging population has fueled demand for medical imaging, in-vitro diagnostics and cardiovascular devices, To pointed out.

Last year, the medical sector reported about 344 million euros ($385 million) of sales, which 5 percent being generated in China. But Kley expects the market to enjoy 10 to 15 percent annual compounded growth in the next couple of years.