Keyuan Petrochemicals, Inc., an independent manufacturer and supplier of various petrochemical products in China, has signed a cooperation agreement with Fangchenggang City to build a new production facility in Guangxi Province. The Company expects to commence construction in February 2012. After conducting extensive preliminary studies for the past 12 months, the Company has decided to build a new petrochemicals production facility, Guangxi Keyuan New Materials Industrial Park, in Fangchenggang City. Keyuan chose this facility due to a combination of factors, including proximity to raw materials supplies, access to stable sources of power and skilled labor, and vast market potential. Furthermore, it could improve the Company's competitive position by extending and expanding its supply chain and manufacturing base. Once the facility is fully operational, Guangxi Keyuan New Materials Industrial Park is expected to have annual production capacity of 400,000 metric tons of ABS (Acrylonitrile Butadiene Styrene).
"This new project is an important component of our long term growth strategy," stated Mr. Chunfeng Tao, Chairman and Chief Executive Officer of Keyuan Petrochemicals, Inc. "It will further diversify our product and customer base, as well as expand our access to the Southern part and Western part of China and the ASEAN (Association of Southeast Asian Nations) markets. We expect to fund this project with bank financing and internal cash flows."