Vital Materials Co, one of the world's largest rare metal materials producers, intends to set up a research and development laboratory in France with its Belgian partner.

The project is part of the framework agreement signed with Cappelle Pigments NV last year, when Vital Materials acquired Cappelle's pigment plant in Tianjin, said Li Jingzhen, deputy general manager of Vital Materials.

The company is the world's largest selenium and tellurium materials producer and one of the leading manufacturers of gallium, indium, germanium, bismuth and cadmium products. The materials are used in products such as solar cells, light-emitting diodes, mobile phones, infrared detection devices, animal feed, lasers and medical equipment.

As part of the lab's mission, related research would help answer to the increasing demand in China for non-hazardous pigments, Li said.

Vital Materials makes more than 100 types of products. Its success since its establishment in 2003 could be attributed to quick responses to market demand, Li said.

The company's booked output stood at 1.9 billion yuan ($306.45 million) last year, down from the peak of 2 billion yuan in 2012, due to declining prices amid the global economic downturn, with about 60 percent of its products exported.

Annual output, however, is expected to top 10 billion yuan by 2017 with a market recovery and more products at the higher end.

The first phase of the joint venture with Belgian company Umicore for producing indium tin oxide sputtering targets is scheduled to go into operation by the end of this year.

When it becomes fully operational, the venture, formed last year and involving a total investment of 420 million yuan, is expected to grab more than 60 percent of the domestic market with annual output of 200 metric tons worth 1.5 billion yuan.

ITO targets are used in products such as TFT-LCD and OLED panels, touch screens and solar cells. The large-scale ITO targets market in China is dominated by overseas producers.

Vital Materials was authorized by the Ministry of Science and Technology in 2013 to build the National Minor Metals Engineering Research Center.