7.5 billion investment, Shenghong to build 300,000 tons of maleic anhydride BDO, 180,000 tons of PBAT project

On March 24, Oriental Shenghong announced that in order to further enrich the industrial chain, optimize and adjust the product structure, improve the added value of products, and enhance the comprehensive competitive strength and profitability of the enterprise, the company's tertiary holding subsidiary, Lianyungang Hongke New Materials Co. Phase I) project.

Biodegradable Materials Project (Phase I) of Lianyungang Hongke New Materials Co.

Construction Location: The project is proposed to be built in Lianyungang Petrochemical Base, Xuwei New District, Lianyungang City, Jiangsu Province, with a total site area of approximately 48.92 hectares.

Construction content and scale: The project proposes to build 340,000 tonnes/year maleic anhydride plant, 300,000 tonnes/year BDO plant and 180,000 tonnes/year PBAT plant and public auxiliary facilities.

Investment amount: The total investment of this project is RMB 7.471 billion, including RMB 6.797 billion in construction investment and RMB 336 million in working capital.

Project progress: The construction period of this project is 3 years. The project feasibility study report has been completed and is still in the pre-approval stage.

According to the estimation, the project is expected to have an annual sales revenue of RMB 5.874 billion and an annual sales profit of RMB 2.119 billion. After the project reaches production, it will have a positive effect on the operating performance of the Company.

The project and the 16 million ton refining and chemical integration project of Shenghong Refining and Chemical (Lianyungang) Co., Ltd. are complementary projects in the upstream and downstream industry chains, using n-butane produced by Shenghong's refining and chemical integration project as raw material for further processing and producing 1,4-butanediol by the maleic anhydride method, and further producing PBAT degradable materials by combining with PTA produced by Jiangsu Honggang Petrochemical Co.

This will extend the industrial chain and increase the added value of the products, which will enhance the comprehensive competitive strength and profitability of the enterprise.

Hongke New Materials was established on 23 December 2021 and is 100% owned by Shenghong Refining and Chemical (Lianyungang) Company Limited, a subsidiary of the Company.