RELEASED ON 21/06/13 (DD/MM/YY)

Keyuan Petrochemicals Inc. announces that in order to meet increasing demands, the company has been working on expanding its manufacturing capacity. In anticipation of the increase in both the market demand for the finished goods and environmental protection requirements, it has adjusted its original expansion plans and is currently working on refining its manufacturing capacity as follows:

a) An ABS production facility in Guangxi region, with an annual production capacity of 400 000 tons. Keyuan began pre-construction activities in February 2012, and the first phase is expected to be completed by the fourth quarter of 2014. The ABS production facility is scheduled to be completed at the end of Q4, 2014.

b) An oil catalytic cracking processing facility as an extension of its catalytic pyrolysis processing equipment, as well as the feed way of the main raw materials to produce synthetic rubber. This facility can reduce production costs and the market risk in the purchase of raw materials, and improve the stability and efficiency of project production to 200 000 tons of heavy oil per year. The oil catalytic processing facility is scheduled to be completed at the end of Q4, 2013.

c) Expansion design capacity of its Ethylene-Styrene facility from 80 000 t/a to 200 000 t/a, among which 120 000 t/a can be used for producing synthetic rubber and 80 000 t/a can be sold to downstream petrochemical companies. Ethylene-styrene is the main raw material (eg. Benzene) from the catalytic cracking oil processing facility to produce Styrene. This facility can be considered the bridge between original products and high-value added products and will complete the integration of internal resources. The Ethylene-Styrene facility is scheduled to come on line at the end of Q4, 2014.

d) A transformer oil facility using hydrogen from the Ethylene-Styrene facility to complete a double hydrogenation process on original products (BTX Aromatic) for refining transformer oil, and producing high-value transformer oil, with a design capability of 100 000 t/a. The transformer oil facility is scheduled to be operational at the end of Q4, 2014.

e) An SSBR (Solution Polymerized Styrene Butadiene Rubber) production facility with a designed capability of 150 000 t/a, which will use its production process technology in synthetic rubber, combining Styrene and Butadiene, to produce SSBR. This product can be used as raw materials for tires, instead of imported Hexakis (Methoxymethy) Melamine (HMMM).

Keyuan also registered its catalytic oil processing facility and transformer oil plant in Ningbo in February 2013, and expects it to be completed and operational in late 2013, at that time, the company will be able to produce medical use and edible products, such as tubes and chewing gum.

The total estimated cost of processing equipment for product refinement and the SSBR production facility is approximately US$149.3 million, including US$49.8 million for processing equipment and US$99.5 million for the SSBR production facility. The SSBR production facility is expected to be started up at the end of Q4, 2015.

Keyuan is currently going through the governmental approval and design phase of the ABS production facility and estimating the related costs. Upon full completion of its expansion, Keyuan's total production capacity will reach 2 443 000 tons per year including, but not limited to, its current petrochemical production of 720 000 tons, Styrene of 200 000 tons, catalytic cracking oil of 200 000 t/a, ABS of 400 000 tons, SSBR of 150 000 tons and transformer oil of 100 000 tons.

SOURCE China Chemical Reporter