SCAC and Tosoh in talks for China PVC

09 July 2001 00:00  [Source: ACN]

Shanghai Chlor-Alkali Chemical (SCAC) and Tosoh Corp are in preliminary talks to set up joint-venture PVC plants in China. Discussions are centered around Tosoh acquiring a stake in SCAC's 300 000 tonne/year PVC project at Caojing, Shanghai, China. There are also plans for another PVC plant, a source close to the talks told ACN last week.

SCAC earlier teamed up with Asahi Glass for the Caojing project, which includes 250 000 tonne/year of vinyl chloride monomer (VCM) and which is targeted to start up in 2003-04. But the joint venture was scrapped last year as Asahi believed that the project was not feasible due to high investment costs (ACN 6 Nov, p33).

Tosoh and SCAC are also in discussion for another project in either northern or southern China, where demand growth is greatest in the country.

SCAC is interested in expanding its presence in these regions. It is also reportedly keen on securing marketing rights in the joint ventures as it would not like to see the emergence of another competitor in the domestic market.

'No startup date for the second project has been set but both parties are anxious to establish their joint venture,' said the source.

The plant would initially have a PVC capacity of only 70 000 tonne/year but would be gradually expanded, the source added.

VCM for the proposed plant would initially be supplied by Tosoh from its plants in Japan. Eventually, VCM, ethylene dichloride and caustic/chlorine plants would also be built by the joint-venture company, said the source.

SCAC currently operates a 300 000 tonne/ year PVC plant in Shanghai which will be expanded by 70 000 tonne/year in the next two years.

Tosoh is interested in expanding its presence overseas as growth in the Japanese vinyl and chloralkali markets has been stagnant for the last few years.

Tosoh has a presence in the Philippines where it recently increased its stake in Mabuhay Vinyl to 50% (ACN 2 July, p6). It also has 60% a stake in Standard Toyo Polymer of Indonesia.

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