Saturn Petrochemical and SK Chemical will jointly build and operate an ethylene acrylate copolymer (“EAA”) plant project in Lianyungang

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On March 12, Zhejiang Satellite Petrochemical Co., Ltd. issued a announcement stating that on March 11, 2021, its wholly-owned subsidiary Jiaxing Santailai Investment Co., Ltd. (hereinafter referred to as “Santailai Company”) and SK Global Chemical (China) Holding Co., Ltd. (hereinafter referred to as “SKGC Company”) signed a Memorandum of Understanding on Cooperation in Xuwei New Area, Lianyungang City, Jiangsu Province. According to the memorandum, Suntaili Company and SKGC Company or its affiliated companies will jointly invest in a joint venture company in the Xuwei New Area of Lianyungang City, Jiangsu Province, to build and operate an ethylene-acrylic acid copolymer (hereinafter referred to as “EAA”) production facility. The planned production capacity of this EAA facility is 40,000 tons per year, with a total investment of approximately 163 million US dollars. According to the memorandum signed by both parties, the joint venture will be established with SK C&C and Saturn Petrochemical contributing 60% and 40% of the capital respectively, and its main business will be the production and sales of EAA. The products of the EAA project are high-end new materials for packaging, featuring excellent adhesive properties, and are widely used in flexible packaging for the food and pharmaceutical industries. Saturn Petrochemical stated that currently, all EAA in the Chinese market relies on imports, and the operation of this facility will fill the gap in domestic production capacity. It is worth noting that this facility will be SKGC’s third plant worldwide and the first in Asia; once operational, it will serve the entire Asian market. It is understood that SKGC is a wholly-owned subsidiary established in China by South Korea’s SK Global Chemical. SK Synthetics Chemicals is part of the SK Group, one of the world’s top 500 companies, and specializes in the production and sales of basic chemical products. Established in 2011, its main business areas are the manufacturing of basic organic petrochemical products and oil refining. According to the memorandum, Suntel Corporation holds 40% of the shares in the joint venture, and both parties will contribute cash in proportion to their shareholdings. It should be noted that the raw material supply for the joint venture is provided by Santei Company. The joint venture between the two parties is located in Lianyungang City, Jiangsu Province. At the end of last year, the machinery for the first phase of Sinopec Lianyungang project’s integrated plant, capable of producing 1.35 million tons of PE, 2.19 million tons of EOE, and 260,000 tons of ACN per year, was officially delivered, and the plant went into operation at the end of the first quarter this year. This is also one of the foundations for cooperation between the two parties. A relevant official from the company said, “At present, domestic chemical parks are under renovation; in the long term, there are actually only seven major biochemical bases that have potential for development, and the Lianyungang Chemical Industry Base, where the Satellite Petrochemicals project is located, is one of them.” ” Satellite Petrochemical is a leading integrated producer in China’s C3 (propylene) industry chain. It possesses production facilities with a designed capacity of 900,000 tons per year for propylene production via propane dehydrogenation, 450,000 tons per year for polypropylene production, 480,000 tons per year for acrylic acid production, and 450,000 tons per year for acrylate production. It also has facilities capable of producing 220,000 tons per year of hydrogen peroxide, 210,000 tons per year of textile chemicals, 150,000 tons per year of superabsorbent resins, and 21,000 tons per year of organic pigment intermediates. The main raw materials required for its production are bulk materials such as propane and butanol.