Keyuan Petrochemicals, Inc. has commenced construction on a new gas-fired boiler to achieve self-sufficiency for steam gas and annual savings of US$1.76 mln (approximately 30%) in steam supply costs. Total investment in the project, expected to be completed by the end of November, is estimated at approximately US$$1.47 mln. Keyuan is a leading independent manufacturer and supplier of various petrochemical products in China.
”Controlling critical supply components, such as steam supply that we use in our manufacturing processes, has both strategic and economic benefits," stated Mr. Chunfeng Tao, founder, chairman and CEO of the Company. "By adding the boiler, we will be able to manage our own steam supply and achieve above-industry-average margins by reducing energy related costs and improving utilization rates. In addition to this and other process improvements, as previously announced, we are also expanding our overall production and facility capacity in order to capitalize on China's growing demand for refined petrochemical products."
Growing demand driven by China's robust economic growth, coupled with under-developed domestic production capacity, has led to an imbalance in supply and demand for refined petrochemical products that is likely to persist for many years. Due to the supply-demand imbalance that exists in China, Keyuan's customer order requests for 2010 have exceeded its current annual production capacity. At March 31, 2010, Keyuan had annual petrochemical manufacturing capacity of 550,000 tons of a variety of petrochemical products, including BTX aromatics. In order to grow its business to meet its backlog and increasing customer demand, Keyuan plans to expand its petrochemical manufacturing capacity to 600,000 tons in 2011. The Company also plans to double its storage capacity to 200,000 tons by the end of 2011, and to add a new raw material pre-treatment facility and an asphalt production facility in 2012.