Sinopec Corp in advanced talks to acquire controlling stake in Dragon Aromatics

21-Oct-15

Chinese state energy giant Sinopec Corp is in advanced talks on taking a controlling stake in petrochemical firm Dragon Aromatics, which operates one of the country's biggest chemical plants, as per sources with knowledge of the matter in Reuters. Sinopec could take up to 80% stake. The discussions come after Dragon Aromatics suffered a second major fire in less than two years at the US$3 bln plant in Fujian and sources said local authorities want Sinopec to participate before allowing the plant to reopen. The tough line shows how Beijing is putting pressure on provinces to ensure better industrial safety standards and protect the environment after a series of accidents has stirred protests from residents opposed to plants in their backyard. Dragon Aromatics, owned by Taiwan's Xianglu Group, was forced to shut the plant with a capacity to produce 1.6 mln tpa of paraxylene (PX), a chemical used to make polyester fiber and plastics, after the fire in April. It is believed that the local government insisted that the plant will not be able to resume opertaions without Sinopec's participation