23-09-2013

INEOS and Sinopec break ground on the largest phenol acetone plant in China

INEOS Phenol and Sinopec Yangzi Petrochemical Company (Sinopec YPC) have today broken ground on the largest Phenol and Acetone plant to ever be built in China. The ground-breaking ceremony for the 1.2 million tonne development was held in Nanjing Chemical Industry Park (NCIP).

INEOS and Sinopec YPC have established a 50% / 50% joint venture company with a total investment of approximately $0.5bn (RMB3.15 bn) which will generate annual sales revenue of around $0.8 bn (RMB 4.9 bn). It is expected that the new plant will be completed and operational by the end of 2016.

The project achieved regulatory approval by National Development Reform Commission (NDRC) on the 27th August. In addition the Jiangsu Province and Nanjing Municipal Government gave the green light to progress the project and start building the plant.

The ground breaking ceremony was attended by Mr.Yang Weizhe, the CCP Secretary of Nanjing City; Mr.Ji Jianye, the Mayor of Nanjing City; Mr Li Chunguang, President of China Petroleum and Chemical Corporation; Mr.Wang Jingyi, Chairman and General Manager of YPC; Mr Harry Deans, CEO of INEOS Phenol and Mr.Brian Davidson, Shanghai Consulate General of UK. Other officers from local government also attended the ceremony.

The new Joint Venture partnership will benefit from Sinopec’s local feedstock advantages and cumene technology alongside INEOS’ proprietary phenol technology. The annual capacity of the new facility will be at least 400,000 tonnes of phenol and 250,000 tonnes of acetone. It will also include 550,000 tonnes/year of cumene capacity. Together, with associated infrastructure, the Joint Venture will be the largest capital investment ever undertaken by INEOS in China and opens new opportunities for the company to meet the needs of this rapidly growing market.

“I am extremely pleased with the progress we have made over the summer which now opens the way for us to build the largest Phenol facility in China. Working together with Sinopec YPC we combine a strong, local partner with INEOS’ phenol technology. When completed we will have access to one of the world’s fastest growing markets, and this will bring considerable value to our customers. This really is a mutually beneficial partnership that is an important development for INEOS Phenol and for INEOS in China,” said Harry Deans, CEO of INEOS Phenol.  

“I am pleased to see the establishment of this important Joint Venture. I strongly believe this new company presents significant value to both companies and their customers in China. This partnership is consistent with the strategic industrial refiorm in the Nanjing area, and is consistent with Sinopec’s strategic focus on integration and growth, putting us in a strong position to meet growing demand for downstream petrochemical products, in the region,”  said Mr Wang Jingyi, Chairman of YPC.

The location of the plant in Nanjing, Jiangsu Province places it at the centre of China's largest market for both phenol and acetone. Once completed, the plant will supply phenol/acetone to customers including on-site consumers. This integration will strengthen and underpin the phenol/acetone derivatives industry in what is the biggest chemical market in Eastern China. The Nanjing Chemicals Industrial Park provides an excellent location with convenient waterway, land and railway transportation conditions.

Following the completion of this project INEOS Phenol will further strengthen its leading position and will be the only company to have global manufacturing capability, with phenol and acetone production in Europe, the USA, and Asia, with sites in Germany, Belgium, and USA (Alabama). China is the world's fastest growing market for phenol and acetone and Sinopec is China's leading producer of phenol and acetone with three production sites in Shanghai, Beijing, and Tianjin.

Phenol and acetone are important organic chemical intermediates. They are widely used in the industries of phenolic resin, caprolactam, bisphenol A, salicylic acid, fibres, plastic, synthetic rubber, pharmaceuticals, agrochemical, dyes, coatings, leather, and epoxy resins.