Japan's Asahi Kasei said on Wednesday it planned to invest C$2.09 billion ($1.53 billion) to build a factory in Canada to produce battery components for electric vehicles.

The company plans to transfer funds to subsidiaries in Canada to buy land and construct a plant to make lithium-ion battery separators, it said in a statement.

The plant is being built primarily to supply Honda Motor's EV production in Canada, the Nikkei newspaper reported earlier. ($1 = 1.3668 Canadian dollars) (Reporting by Kantaro Komiya and Rocky Swift; Editing by Jacqueline Wong and Rashmi Aich)