Taiwan's China Petrochemical Development Corp., or CPDC, said that it plans to invest T$30 billion ($989 million) to build a phenol-acetone plant in east China's Jiangsu province.
"The project is still being discussed ... The plant will produce phenol and other products such as acetone," said a spokesman from CPDC, declining to provide more information.
The company said that T$11.5 billion of the investment will come from its own funds, while the rest would come through financing from China or other sources, the company said in a statement to the Taiwan Stock Exchange on Tuesday.
CPDC said that the project has been approved by its board of directors and that it would soon submit proposals to Taiwanese and Chinese authorities for approval.
The new plant is expected to begin operations two years after receiving regulatory approvals.
Investing in phenol, a material used in the production of caprolactam, would facilitate vertical integration of the company's operations and secure access to the raw material, CPDC's Chairman Sheng Ching-jing was quoted as saying in a report by Taipei News.
CPDC is one of the world's top five producers of caprolactam, widely used in fibers and plastics. It owns three caprolactam plants in Taiwan -- a 200,000 mt/year plant at Hsiaokang, a 100,000 mt/year plant in Toufen and a 65,000 mt/year plant in Kaohsiung.
The Kaohsiung plant has been shut since 2003 due to poor economics.
CPDC was established in 1969 and was a state-owned enterprise under the supervision of Taiwan's Ministry of Economic Affairs. It was listed on the Taiwan Stock Exchange in 1991 and was subsequently privatized in 2005.
In August, CPDC and three other Taiwanese companies signed a memorandum of understanding to invest in an integrated and petrochemical complex in southeastern China's Fujian province, which is being led by state-owned China Petrochemical Corp., or Sinopec Group.
USI, Ho Tung Chemical, LCY Chemical and CPDC said in separate statements that they were interested in investing in the project in the Gulei Petrochemical Industrial Zone in Zhangzhou city.
Representatives from all four companies attended a signing ceremony held in Beijing on August 16 for the project's framework agreement between the Fujian provincial government, Sinopec and Taiwan Gulei Petrochemical (Zhangzhou).
According to a statement by the Fujian provincial Development and Reform Commission, the initial size of the complex is pegged at 16 million mt/year (321,315 b/d) for the oil refinery and 1.2 million mt/year for the steam cracker, with total investment estimated at $4.5 billion.
