(Yicai Global) Sept. 19 -- Zhejiang Yisheng New Materials intends to construct a CNY6.73 billion (USD900 million) plant capable of turning out 6 million tons of pure terephthalic acid a year as the company seeks to expand its market share and cut production costs.
The new plant will be located in the eastern Chinese city of Ningbo, the company's joint owners Zhejiang Hengyi Petrochemicals and Rongsheng Petrochemical said in separate statements yesterday. Initial estimates suggest it could earn about CNY33 billion a year once full output is achieved.
The project will include the building of two facilities to make PTA, the main ingredient used in polyester, over two phases. Since public facilities are already in place at the site, only a small number of support services are needed.
So far, the total annual PTA output of firms in which Hengyi Petrochemicals holds shares and controlling stakes, all of them global producers, is about 13.5 million tons, according to its website. Rongsheng Petrochemical's situation is the same.
Rongsheng Petrochemical also said it will invest about CNY2.52 billion in northeast Dalian to build a polyester production base with annual output of 1 million tons. It did not say whether that project will use the PTA made at the Ningbo factory.
The first phase of Hengyi Petrochemicals' Brunei petrochemical project, with a USD3.45 billion investment, started operating in July. In addition to meeting the needs of the local petrochemicals market, it will also supply raw materials for Hengyi's domestic PTA plants.