Dragon Group faces 6-month delay at Xiamen PX

04 June 2007 11:39  [Source: ICIS news]

SINGAPORE (ICIS news)--The Dragon Group’s paraxylene (PX) project will be delayed for at least six months pending a reassessment after close to 2,000 people protested outside the Xiamen government.


The company was in talks with the government on the losses it will incur during the six months and whether or not it will be able to obtain environment approval after the reassessment, a Dragon Group spokesman said on Monday.


The company’s yuan (CNY) 10.8bn ($1.4bn) PX project is embroiled in a stand-off between the public and the government which has backed down from its earlier hard line stance.


Residents in Xiamen, Fujian province, called the aromatics project “an atomic bomb” and sent nearly 1m text messages via mobile phones to protest against it on environmental and health concerns.


The Xiamen government bowed to public pressure and suspended it last week, seeking to resolve the matter through public consultation.


The performance of local governments in China is measured according to their gross domestic product (GDP) contribution and this often create conflicts in the safety of residents and protecting the environment.


A government spokesman told the local media in a press conference on Sunday that it received 1,557 opinions on the project.


While some said the environmental problems could be solved, others wanted to cancel the project, he was quoted saying, according to the reports.


The government spokesman could not be immediately reached for comment.


It was also unclear if the Dragon Group will need to move the project 100km away from residential areas as requested by the public.


The company spokesman said such a move will incur additional costs and the company could lose its integration advantage.


Operated by subsidiary Dragon Aromatics, the plant was designed to produce 800,000 tonnes/year of PX, 160,000 tonnes/year of orthoxylene (OX) and 228,000 tonnes/year of benzene.


Construction started in November 2006 and the plant was initially scheduled to start up at end-2008.


The PX output was to be sold to Xiang Lu Petrochemical, one of China’s largest purified terephthalic acid (PTA) producers, which is also located in the Haicang district.



By: Florence Tan
+65 6780 4359

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