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 HONG KONG, Jan. 6 /PRNewswire/ -- Shanghai Petrochemical Company Limited (NYSE: SHI) today announced that it is increasing its investments in China Jin Shan Associated Trading Corporation and Shanghai Jin Dong Petrochemical Development Co. Ltd, two associate companies involved in trading and investment. The investments are part of a move by Shanghai Petrochemical to
strengthen its downstream production and distribution capabilities. Shanghai Petrochemical also announced that it had established a new company -- Shanghai Jin Hua Industrial Development Company -- which will own petrol stations and trade in petrochemical products.
 Following an agreement with the company's other shareholders, Shanghai Petrochemical is to increase its shareholding in Jin Shan Associated to 70% in return for a capital injection of Rmb 15 million. The other shareholders -- China Chemical Import and Export Corporation, China Technology Import and Export Corporation and Shanghai Foreign
Trade Corporation -- will in future hold 10% each. Following the reorganization, which became effective on Jan. 1, 1994, Shanghai Petrochemical will nominate eight representatives to the board of Jin Shan Associated.
 Established in 1982, Jin Shan Associated is engaged in the trading of petrochemicals, synthetic fibres, plastic products, turnkey equipment and related facilities and spare parts. In addition, the Company is involved in a number of production joint ventures, technology exchanges, the processing of raw materials, industrial assembly and compensation trade.
 Jin Shan Associated has customers in 33 countries around the world. Its annual foreign exchange earnings average over U.S. $40 million on trading volume of U.S. $100 million. In 1992, Jin Shan Associated was ranked one of China's 200 largest trading companies.
 "Jin Shan Associated has established a reputation at home and abroad for its extensive distribution network and strong sales force. We believe it is an ideal vehicle for Shanghai Petrochemical to develop its trading capabilities. It will help us fulfill our commitment to increase our foreign exchange earnings," said Mr. Wang Jiming, Chairman of the Board and President of Shanghai Petrochemical.
 In a similar move, Shanghai Petrochemical has reached an agreement with Sinopec Shanghai Jinshan Industrial Company, Shanghai Xing Cheng Industrial Company and Shanghai Economic and Technological Development Company to reorganize the shareholdings of Jin Dong Petrochemical Development Co. Ltd, a trading and investment company. Shanghai Petrochemical is to inject Rmb 34 million in new capital, giving it 56.67% of the enlarged share capital. Following the reorganization, the other shareholders in the company will have 35%, 5% and 3.33% respectively. Shanghai Petrochemical will appoint two representatives to the board of Jin Dong Petrochemical.
 Jin Dong Petrochemical was established in 1992 and is involved in trading as well as industrial development and investment in the Pudong area. The company is currently developing an industrial area in Bei Cai
County of Pudong. Several medium- to long-term developments are planned with an expected average investment return of 15%.
 The common theme of these projects is the introduction of high technology for the manufacture of such value-added projects as CO2 and other gases, plastics, polyester products, bi-oriented polypropylene film, polyester decorative fabrics, carbon fibre and special liquefied petroleum gases. To date, 15 such projects are under negotiation, three are under development and two are completed and commissioned.
 "Shanghai's Pudong area will undoubtedly be one of the fastest- growing economic zones in China in the 1990s. The region already boasts a solid foundation after only three years of development. Our investment in Jin Dong Petrochemical provides a timely opportunity for Shanghai Petrochemical to benefit from the region's industrial growth. It will also provide a valuable extension to our downstream production capacity," said Mr. Wang.
 Shanghai Jin Hua Industrial Development Company operates petrol stations and markets petrochemical products. Shanghai Petrochemical owns Rmb 7 million of the company's Rmb 10 million in paid-up capital. Other shareholders include Shanghai Jin Shan Petrochemical Engineering Company and Shanghai Jin Dong Petrochemical Development Co. Ltd.
 Shanghai Petrochemical Company Limited is China's largest petrochemical company and the country's ninth-largest industrial enterprise by 1992 sales. Located in Jinshanwei in the southwest of Shanghai, the Company is a highly integrated petrochemical complex which processes crude oil into a broad range of synthetic fibres, resins and plastics, intermediate petrochemicals and petroleum products. The Company's 'H' shares are listed on The Stock Exchange of Hong Kong Limited and in the form of American Depository Receipts on the New York Stock Exchange. The depository for the ADR program is The Bank of New York. Each ADR represents 100 class 'H' ordinary shares.
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 /CONTACT: Cai Hong Ping of Shanghai Petrochemical (in China), 8621-794-3143; or Corey Cutler of Dewe Rogerson Inc. (in the U.S.), 212-688-6840/

CO: Shanghai Petrochemical Limited ST: IN: CHM SU:

JG -- NY049 -- 9733 01/06/94 11:45 EST
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Publication:PR Newswire
Date:Jan 6, 1994

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