Wankai New Material Plans to Build MEG Project

Wankai New Materials recently announced that it will use the remaining over-raised funds raised by the initial public offering of shares of 86,678,500 yuan to invest in an additional annual output of 1.2 million tons of ethylene glycol (MEG) and 100,000 tons of electronic grade dimethyl carbonate (DMC) new materials project (Phase I) by paid-in registered capital.

It is reported that Wankai New Materials has recently actively laid out and extended the upstream industrial chain to continuously consolidate the market competitiveness of the main business products. At present, Chongqing Wankai, the holding subsidiary of Wankai New Materials, has an annual output of 600,000 tons of bottle-grade polyethylene terephthalate (PET) project in the third phase, and the company's overall annual output of bottle-grade PET has reached 3 million tons. At the same time, in order to gradually extend the bottle-grade PET industry chain, the company takes its subsidiary, the Zhengdakai New Materials Co., Ltd, as the main implementation body, and invests in the construction of an annual output of 1.2 million tons of MEG and 100,000 tons of electronic-grade DMC new material project, and lays out the construction of ethylene glycol, an important raw material, and the project is constructed in two phases.

Specifically, the annual output of 1.2 million tons of MEG coproduction of 100,000 tons of electronic DMC new materials project will form an annual output of 600,000 tons of MEG after the completion of the first phase. Wankai New Materials said that after the project is completed, it can not only meet the needs of some companies for raw material MEG, effectively reduce import dependence, improve the safety of raw material supply, but also optimize and improve the MEG production process in combination with the specific needs of raw material properties in the production process of bottle-grade PET of downstream products, which is conducive to independent control of raw material quality. Further enhance the market competitiveness of the company's PET products.

Meanwhile, the market price of MEG varies greatly with the fluctuation of crude oil price. Wankai New Materials said that the natural gas resources around the project are particularly rich, the supply is large and stable, and the local materials can obtain natural gas raw materials with significant price advantages. Through this project, the company can extend the industrial chain upward, which can ensure that the company's MEG cost is in a stable range for a long time, further reduce the risk of raw material price fluctuations, and improve the stability of operations.

In addition, MEG phase 1 600,000-ton project will introduce advanced 600,000-ton syngas production equipment, with significant scale effect, and further reduce the unit production cost. At the same time, the location of the project is close to the Chongqing Wankai production base, and according to the company's calculation, the freight can be reduced by about 50%. In the future, the nearby supply of MEG can effectively save the transportation cost of raw materials, reduce the unit cost of the company's bottle-grade PET production, and further enhance the market competitiveness of PET products.