US industrial group Honeywell and China's Sinochem have agreed to form a 50-50 joint venture to make and sell energy-efficient foam insulation in China, the two companies announced Monday.

The joint venture will produce HFC-245fa, a non-ozone-depleting rigid foam blowing agent used in insulation for appliances, construction, transportation and other applications "where maximum energy efficiency is required," they said in a joint statement.

The deal requires approval from Beijing. The new company would be located in Taicang, Jiangsu Province, with production expected to begin in late 2013.

The terms of the agreement between Honeywell International and the Chinese state-owned Sinochem Group were not included in the statement.

"This joint venture with Sinochem, one of the strongest companies in China, will help meet growing demand for this material as Asian customers rapidly adopt more energy efficient and environmentally compliant materials," Andreas Kramvis, president and chief executive of Honeywell Specialty Materials, said in the statement.

"Having Asian supply close to local customers is important to ensure global supply of this material in the future."

Yinping Wang, vice president of Sinochem Group, said that the formation of the joint venture would enhance the two firms' product portfolios and service capabilities in "energy efficient and environmentally friendly materials."

Honeywell shares were up 3.1 percent at $46.88 in afternoon trade on the New York Stock Exchange.