Qapco opens three new bonded warehouses in China

24 December 2010 16:47  [Source: ICIS news]

SHANGHAI (ICIS)--Qatar Petrochemical Company (Qapco) has built three new bonded warehouses in China to expand its logistics capabilities ahead of increasing exports to the country, the company said on Friday.

The three new bonded warehouses are in Shanghai, Guangzhou and Qingdao, and will be used to store and transport its low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) products throughout China, Qapco said.

"We will expand the capacity of our LDPE unit in Mesaieed [Qatar] from 400,000 tonnes/year to 700,000 tonnes/year next year," said Mohammed Yousef Al-Mulla, general manager of Qapco, at the inauguration ceremony of the company's logistics services facilities, which took place at the Jin Mao Tower in Shanghai.

"We plan to ship product by December 2011," he added.

Qapco is also building an LLDPE plant at the same site with a capacity of 450,000 tonne/year, which is also scheduled to be completed next year.

The company's LDPE products are sold to about 4,500 customers in 85 countries, said Al-Mulla.

"China is considered our largest and most important market in the world, accounting for around 35% of sales. As we grow capacity, we expect China to continue to account for about 35% of the higher sales," he said.

While Qapco benefits from cost-advantaged, ethane-based feedstock in Qatar, it plans to price its products in China in line with local market prices based on demand and feedstock values next year, said Abdulrahman Ali Al-Abdullah, group manager, commerical & marketing, at the event.

Prices of many petrochemical and polymer products in China increased this year alongside overall inflation pressures, said Al-Mulla.

However, despite higher product prices, driven partly by higher crude oil prices, the weak US dollar in 2010 lessened the profit impact, he added.

In 2011, Qapco expects steady but strong overall product pricing.

"We expect 2011 to be a more stable year for prices - no big declines or big gains. The industry expects a good, solid year for petrochemicals and polymers," said Al-Mulla.

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By: Amanda Zhang
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