A subsidiary of Sinopec - Yizheng Chemical Fiber announced a joint venture with Taiwan Far Eastern New Century Corporation to establish a new plant for production of purified terephthalic acid (PTA).
The PTA plant will be set up at a cost of US $600 million and will a capacity of one million tons, which will be expanded to two million tons in the near future.
Far Eastern currently operates two PTA plants, one in Taiwan and the second in Shanghai, China. The combined capacity of the two plants is 1.60 million tons of PTA per year.
Far Eastern is optimistic about the future growth in the Chinese domestic market. The joint venture is named Far East & Yi Chemical, with registered capital of US $250 million, of which, Far East holds 60 percent of the stake, while Yizheng holds 40 percent.
Far Eastern also plans to expand PTA capacity at its plant in Taiwan, which will reach 1.5 million tons in 2014. Coupled with the new proposed PTA plant, PTA capacity under Far Eastern will reach 5 million tons by 2014.
It is expected that Far Eastern will become the number one Asian PTA producer, once all the capacities are operational.
Sinopec the other partner in the new JV will supply paraxylene (PX) for the proposed new PTA plant. Far Eastern currently sources its raw materials from Sinopec.
Yizheng Chemical Fiber mainly produces and sells polyester chips and polyester fiber and also produces PTA, which is the main raw material for polyester fibre.