Tosoh/SCAC disagree on PVC jv costs

12 August 2002 00:00  [Source: ACN]

Tosoh Corp and Shanghai Chlor-Alkali Chemical (SCAC) are in disagreement over estimates for the cost of their proposed joint-venture PVC project in China. However, talks between Tosoh and SCAC, which were brought to a halt by a dumping investigation initiated by China in Q1 this year, are likely to resume soon.

The Japanese trading major believes the planned 70 000 tonne/year plant, which would be located at Qingdao in Shangdong province, should cost no more to construct than Mabuhay Vinyl's facility, also 70000 tonne/year, in the Philippines. Tosoh is a 50% shareholder in Mabuhay Vinyl. Tosoh is conducting a feasibility study into the China project, which is due to be completed by end-2002.

The project is expected to start up around 2004 with an agreement to lease land from the Qingdao government already in place. Previously, it had not been disclosed where in China the two companies wanted to locate their project (ACN 9 July 2001, p22).

Vinyl chloride monomer for the plant would initially be supplied from Japan by Tosoh with the eventual intention to integrate the project back to chloralkali. Also, the PVC capacity of the project could be expanded.

ACN understands there is a substantial gap between Tosoh's and SCAC's cost estimates, but that discussion will take place in an effort to reach a compromise. All negotiations between the two potential partners came to a halt earlier this year because of sensitivities arising from China's dumping investigation into PVC imports from Japan, South Korea, Taiwan, Russia and the US. One of the petitioners for the antidumping action was SCAC.

China's Ministry of Foreign Trade and Economic Co-operation is continuing its evaluation of evidence submitted concerning the allegations (see p8).

It also emerged last week that Tosoh had been interested in supplying technology for SCAC's PVC project at Caojing, near Shanghai. However, they have not been included in a shortlist of potential suppliers that includes Chisso and Germany's Vinolit.

ACN had earlier understood that both Tosoh and Asahi Glass were also in talks to take an equity position in the Caojing project, which will be back-integrated to chloralkali. Neither Tosoh nor Asahi will take stakes in Caojing, ACN now understands. But Asahi will supply the technology for the Caojing chloralkali plant.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly