Sinopec Yizheng Chemical Fibre Announces Formation Of JV

Sinopec Yizheng Chemical Fibre Co., Ltd announced that on November 29, 2011, the Board passed a resolution to approve into the Joint Venture Agreement to be entered into by the Company with Far Eastern Holding, pursuant to which the Company and Far Eastern Holding would agree to establish a joint venture company, Far Eastern Yihua, in Yizheng City, Jiangsu Province, the PRC.

Far Eastern Yihua will be principally engaged in the production and sale of PTA. The Joint Venture Agreement is expected to be signed in early December, 2011. Pursuant to the Joint Venture Agreement, the registered capital of Far Eastern Yihua is USD250 million (equivalent to approximately HKD1.95billion), in which capital contributions of the Company and Far Eastern Holding shall respectively account for 40% and 60%.

The Company will pay in RMB in cash and Far Eastern Holding will pay in USD in cash remittance.In order to boost the competitiveness and economic efficiency of the PTA project, the two Parties agreed that the construction scale of this project will be increased from the original 1,000,000 tonnes per year to 2,000,000 tonnes per year, and the latest processing technology and equipments in the world will be used. Besides, the PTA project will be located at Yangzhou Chemical Industry Park, and be expected to commence construction in 2012. Its construction period will last for 27 to 30 months.

(reuters.com)