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SHANGHAI PETROCHEMICAL COMPANY SIGNS AGREEMENT TO START A PLASTICS JOINT VENTURE

 SHANGHAI, People's Republic of China, Sept. 29 /PRNewswire/ -- Shanghai Petrochemical Company Limited (SPC) (ADRs - NYSE: SHI), the largest petrochemical enterprise in China, today announced that it has established a joint venture with two Japanese partners to manufacture plastics and resins in Shanghai. The joint venture, to be called Shanghai Jinchang Engineering Plastics Co. Limited, will produce and sell a range of polypropylene products with forecast annual sales of US$15 million (approx. Rmb136 million) when the plant reaches rated capacity.
 The three partners -- SPC, C. Itoh & Co. Ltd., a Japanese trading group, and Chisso, a petrochemical producer -- will put up half of the US$9.5 million investment in the project, with SPC contributing 60 percent of this initial equity. The balance of the investment will come in the form of bank finance guaranteed by all three partners.
 Under the terms of the agreement, SPC is to provide the joint venture with resins supplies, Chisso will transfer the technology required in the manufacturing process as well as certain management and training skills, and C. Itoh will help market the products overseas. Shanghai Jinchang expects to market an estimated 15 percent of its products overseas. The joint venture has already received the necessary approvals from the Shanghai City Foreign Investment Committee, including the authority to remit foreign exchange.
 The joint venture will use advanced technology to the latest international standards to manufacture and sell the polypropylene products. Construction on the plastics and resins plant is to begin in October this year. The plant, which will be built near SPC's existing facilities, is due to be commissioned in December 1994.
 According to an SPC spokesman, the plant is expected to produce 9,300 tonnes of polypropylene resins and 700 tonnes of marster batch a year at full capacity. Processed polypropylene resins are versatile plastic materials used in a range of plastic products such as dashboards for cars, moldings for car and domestic air conditioners and fans, and other household products.
 "SPC, C. Itoh and Chisso are all internationally acclaimed enterprises. Together we will provide a solid foundation for the development of Shanghai Jinchang. The joint venture will be able to capitalize on SPC's reliable source of raw materials to produce a range of plastic products and to further extend its production process," said the SPC spokesman.
 Shanghai Petrochemical Company Limited is China's largest petrochemical enterprise and the country's ninth-largest industrial company by 1992 sales. In July, Shanghai Petrochemical raised a total of approximately US$343 million through a global offering of H shares. The company's H shares are traded on the Hong Kong Stock Exchange and in the form of American depositary receipts on the New York Stock Exchange.
 -0- 9/29/93
 /CONTACT: Cai Hongping of Shanghai Petrochemical, in China, 8621-794-3143; or Steven Kennedy or Corey Cutler of Dewe Rogerson Inc., 212-688-6840/
 (SHI)


CO: Shanghai Petrochemical Company Limited; C. Itoh & Co. Ltd.;
 Chisso ST: IN: CHM SU: JVN


PS-TW -- NY010 -- 6692 09/29/93 09:32 EDT
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Publication:PR Newswire
Date:Sep 29, 1993
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