Keyuan Petrochemicals will expand production capacity 30% from 550,000 to 720,000 tonnes in response to 17% higher production and sales. The Ningbo, China based maker of aromatics, propylene, styrene, MTBE, and other chemicals, will invest $3.8 million to upgrade the catalytic pyrolysis processing equipment used in its existing facilities.
Design and installation are scheduled to begin in March 2011, with completion anticipated by the end of the second quarter. The facility's existing design capacity of 550,000 tonnes/yr will be outstripped by 2010's forecast production and sales of 660,000 tonnes. In 2011, production and sales of 740,000 tonnes is forecast, with revenue guidance of $660.5 million, well above 2010's $550 million.
The plant's flexible production technology allows it to crack light and heavy feedstocks. The company is assuming that 70% of its feedstock inputs will be heavy oil, with 30% coming from light oil and benzene. The company notes that heavy oil is generally RMB 1000/tonne cheaper than naphtha and more readily available.
Instead of a fluidized catalytic cracking (FCC) process, Keyuan uses a catalytic pyrolysis process that reportedly results in higher reaction temperatures, while generating 15% higher yield than FCC.
Keyuan is located in the Qingshi Chemical Park and employs more than 300. The expansion of manufacturing capacity will also include a raw material pre-treatment facility, additional storage capacity, and an asphalt production facility.
Keyuan says it has invested $132 million to date in the facility, which covers a total of 1.2 million ft2, including 594,000 ft2 for production and 19,500 ft2 of laboratories and offices. Third quarter revenues were up 14.7% over 2010 to $151.3 million, according to a Nov. 16 earnings statement. Net income rose 60.3% from the year-prior quarter to $7.9 million. Keyuan issued full-year 2010 revenue guidance of $550 million, with forecast net income of $36.3 million.
The company acquired four parcels of adjacent land covering 367,000 ft2 for $5.8 million from the local government of Ningbo on August 18. That area will be used for a new styrene-butadiene-styrene (SBS) production facility, a raw materials pre-treatment facility, a storage site, and an asphalt production unit, with a total cost of $87.5 million, including $10 million of working capital.