China Keyuan Petrochem to build 70,000 tonne SBS plant in Ningbo

25 August 2010 22:50  [Source: ICIS news]

NEW YORK (ICIS)--Chinese producer Keyuan Petrochemicals will build a 70,000 tonne/year styrene-butadiene-styrene (SBS) facility adjacent to its plant in Ningbo, Zhejiang province, the company said on Wednesday. 

“We see tremendous opportunity to gain market share in the SBS market, given the value-added nature of the product and the supply-demand imbalance that exists today,” said Keyuan Chairman and CEO Chungfeng Tao.

SBS is used in shoe soles, tire treads and other products that require a hard, durable rubber.

Keyuan estimated that China’s current SBS production capacity was 600,000 tonnes/year and projected that domestic demand would reach 750,000 tonnes this year.

Keyuan said it acquired land for the projects, totalling 1.2m square feet (111,000 square metres), for $5.8m (€4.6m) through land use right transfer agreements with the city government.

Construction of the SBS plant, which will cost about $17.5m, will begin in the third quarter, and it should end in the second half of 2011, the company said.

Keyuan will also begin building a 100,000 tonne/year petrochemical storage facility, a raw material pre-treatment plant and a 300,000 tonne/year asphalt plant on the site. Keyuan estimates the projects will cost about $70m in total.

Keyuan should complete the raw-material and asphalt facilities in the first half of 2011, the company said. The storage facility should be finished in the second half of 2011.

Keyuan said it expected the SBS facility to generate about $110m/year in sales and $10m-11m in net profit once it reached full capacity.

The company expected the other three projects to generate sales up to $298m and net income of about $30m/year.

($1 = €0.79)

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By: Clay Boswell
+1 713 525 2653

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