(Yicai Global) March 23 -- Xinfengming Group plans to build a production project for functional polyester fibers and upstream raw material purified terephthalic acid in Shanghai-adjacent Hangzhou Bay's northern area with an expected total investment of CNY13 billion (USD1.8 billion).

It has penned an investment deal with the Administration Commission of Zhejiang Dushan Port Economic Development Zone where the complex will be based, the Tongxiang, Zhejiang province-based private supplier of high-end polyester filament said in a statement yesterday. The project includes manufacturing equipment capable of producing 4 million tons of PTA and 2.1 million tons of differentiated and functional fibers each year, supporting and office spaces, a research and development center and other facilities.

The company's shares [SHA:603225] closed 2.65 percent higher at CNY10.83 (USD1.53) at lunch today on the news.

The project will break ground within six months after securing land use rights, per the statement, and will conclude and go into production within two years after construction starts.

Extending to upstream industrial chains, the investment aims to enhance the firm's business stability and secure cost advantages, it added, and will increase its production scale of synthetic fiber and thus enhance its scale advantage and overall competitive strength.

Zhejiang Dushan Port Economic Development Zone, with its deep water harbor, is a key logistics hub and a large industrial cluster in northern Zhejiang province, per the statement.

PTA is an ingredient used to produce polyester fiber and polyethylene terephthalate resins made through a process that oxidizes p-xylene in an acetic acid solution, according to the website of the American Chemical Society.

Editor: Ben Armour