24 June 2008 11:23 [Source: ICIS news]
SHANGHAI (ICIS news)--Hong Kong-based Global Bio-chem Technology Group plans to invest yuan (CNY)8bn ($1.2bn) to construct a 1m tonne/year corn-based monoethylene glycol (MEG) project, said a Jilin government official on Tuesday.
The plant was expected to begin operations in 2009, said a company source.
"The new plant will use corn to produce MEG to obviate the cost pressure from high and tight crude oil resource, but the industry cannot use more than 28% of the corn produced in China for MEG purposes, which would mean restricting the development of the bio-based MEG," the source added.
The project in Jilin province, northeast China, would be funded through a CNY5bn loan from China Development Bank, while the company would raise the remaining CNY3bn, the source said.
It was difficult to satisfy the MEG demand in China by using crude oil feedstock alone due to high costs and tight supply, which made it necessary to develop bio-based MEG, said a producer.
"We are also considering other resources, such as cassava and sugarcane to produce MEG in the future to reduce our dependence on corn," the source from Global Bio-chem added.
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