Keyuan Petrochemicals, a Qingshi Chemical Park, Ningbo, Zhejiang-based leader in the Chinese petrochemical sector, has a current annual refining capacity of some 550k metric tons in over five categories, from BTX aromatics and MTBE to propylene, styrene, and other chemicals.
Always looking to strategically expand output, KYNP announced today that construction has begun on a new Styrene-Butadiene-Styrene (SBS) facility.
Chairman and CEO of KYNP, Chungfeng Tao, cited rising demand across China’s market for SBS as a component in shoe soles, tire treads and other applications requiring a durable hard rubber.
Current production of SBS in China is roughly 600k MT/year, yet demand is projected to be 20% higher than output this year alone, with a 6-7% growth rate per year, all of which creates prime conditions for domestic Chinese producers.
The new facility, located at the Company’s main site in Ningbo, should add another 70k MT to KYNP’s annual output, satisfying over a third of China’s demand at a projected cost of $17.5 in capital expenditures.
Projected net profit margins of 10% (when the facility is operating at normal production levels), 80% utilization by 2012 (the first year of anticipated production), and an estimated $110M in sales with $10-11M net income all adds up to strong returns for the Company’s investors.
The ability to help China offset the need to import SBS, while filling a supply gap amid rising demand both domestically and abroad, are key aspects of the new SBS facility, which is scheduled for construction in three phases:
Sept. 2010 – Mar. 2011, Civil Engineering
April 2011 – Sept., Equipment Install
Oct. 2011 – Nov., Trial runs culminating in production cycles
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