10 January 2005 00:01 [Source: ACN]
SHANGHAI Huayi Group has replaced Guangzhou Zhongkexin Group as the partner for Elion Resources Group’s polyvinyl chloride (PVC) project in Erdos, Inner Mongolia, China.
A source from Elion told ACN that Zhongkexin had withdrawn from the 50:50 joint venture, and Elion had signed an agreement with Huayi to cooperate on the project. Zhongkexin and Elion had formed a joint-venture company, Yili Chemical, for the PVC project. With the change of partners, Huayi will now own 48% of Yili and Elion 52%.
ACN had earlier been told that Shanghai Chlor-Alkali Chemical was considering investing in the project through its parent company, Huayi, but Huayi’s stake was not known then. Zhongkexin was also considering whether or not to go ahead with the project, as it was concerned about the management of the project and the high risks involved (ACN 13 December 2004).
Elion plans to produce 1m tonne/year of PVC (ACN 15 March 2004), but the source could not say when this would be achieved.
He said Elion had revised the capacity of the acetylene-based PVC project’s first phase from 500 000 tonne/year to 400 000 tonne/year as it would be more efficient. Feedstock could be purchased locally. A chlor-alkali unit of the same capacity would also be built. Mechanical completion was scheduled for May 2006.
The project’s first phase would cost about Rmb4bn (US$483.3m). But the source could not say how the companies planned to finance the project.
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