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February 23, 2006

1 Min Read
GE suspends PC JV in China

GE Plastics and PetroChina Co. Ltd. have jointly decided to walk away from a polycarbonate (PC) production project in China, wherein PetroChina would have supplied feedstocks for a phosgene-free melt-technology-based plant to serve the Chinese market. The deal, which was announced in June 2006, would have added China to a list of PC-producing locales for GE that include the U.S. (Mt. Vernon, IN; Burkville, AL), Europe (Bergen op Zoom, Netherlands; Cartagena, Spain), and Japan. The dissolution of the deal was initially reported by Chemweek Business Daily.

The joint decision was made “due to significant changes in the economics of the PC markets, which make it difficult for the project make an acceptable economic return,” responded Brian Gladden, vice president and general manager of Lexan resin and global product companies, to e-mailed questions. “Returns in the polycarbonate market have significantly contracted due to high raw-material prices and excess capacity.”

Gladden said that GE is continuing with previously announced PC compounding expansions, which are supplied via imports of Lexan PC, since GE has no local manufacturing of the engineering resin.

Gladden said there is no tentative plan at this time of when the project might be restarted, adding that China’s PC capacity should double over the next two years. GE PC competitor, Bayer MaterialScience (Leverkusen, Germany) has $3.1 billion investment planned for China, including a Makrolon PC plant in Caojing, Shanghai, with an anticipated capacity of 200,000 tonnes/yr. That operation was set to open in the second quarter of 2006.—[email protected]

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