Aug 9 2004
Singpu Chemicals Ltd., today unveiled a medium-term Strategic Business Plan, aimed at advancing an overall strategy geared to achieve increased growth and profitability.
Under the business plan, the Group will invest an estimated US$216 million in a series of initiatives which will include the creation of new capabilities for the production of VCM (Vinyl Chloride Monomer), doubling of its chlor-alkali production capacity, and expansion of our co-generation plant from 60MW (megawatts) to 120 MW. The projects will be implemented in phases over the next three years. The initial phase will be financed through internal funds and bank loans. For subsequent phases, various funding options will be considered.
The key elements of the medium-term business plan include:
- Construction of a new VCM plant – Estimated investment of US$90 million
An estimated US$90 million will go into the construction of a new VCM plant, and will include auxiliary facilities to support an annual production capacity of 200,000 tonnes of VCM, based on direct chlorination process and oxy-chlorination process. The VCM plant will be located on a reserved 1 sq km site within Singpu Chemicals’ flagship chemical facility located in the China Fine Chemical Industry Taixing Park (“Taixing Park”) in Jiangsu Province. Construction of the new plant is scheduled to begin in early 2006, and expected to be completed in 2007.
- Doubling of chlor-alkali capacity – Estimated investment of US$43 million
To meet the rising demand for chemicals as the PRC continues to establish itself as a manufacturing hub, Singpu Chemicals will construct a new chlor-alkali facility which will be housed within its existing chemical facility at Taixing Park.
Construction of the chlor-alkali plant will commence in 2005. The new capacity, scheduled to come online in late 2005, will double the Group’s annual production capacity of caustic soda and chlorine to approximately 300,000 tonnes and 264,000 tonnes respectively. The annual production capacity of aniline will also double to approximately 90,000 tonnes. The additional supply of aniline and caustic soda will allow Singpu Chemicals to capitalise on the demand for these chemical raw materials in the PRC, while the additional supply of chlorine will be used internally for the production of VCM.
- Construction of co-generation plant – Estimated investment of US$83 million
In anticipation of the demand for electricity needed to support the new strategic business plan, Singpu Chemicals intends to augment its originally-planned US$43 million 60MW co-generation plant (currently under construction), by a further 60MW. The 120MW co-generation plant will cost approximately US$83 million, and is aimed at reducing Singpu Chemicals’ energy costs, and improving the Group’s competitiveness. The first 60MW co-generation plant will be completed by late 2005, with the additional 60MW capacity expansion to be added by late 2006.
- Singpu Chemical Industries (Yancheng) Co., Ltd (“Yancheng”)
The Group’s strategic thrust is to invest in core and profitable businesses, while divesting underperforming assets. In line with this, the Group intends to divest its investment in Yancheng. “We believe that this divestment will improve the Group’s overall performance," said Mr Chan.
Singpu Chemicals, incorporated in Singapore, has a long and successful history in the PRC. The Group’s commitment in the PRC began more than a decade ago when it saw the growing potential of the chemical industry in Jiangsu Province. The Jiangsu Province has proven to be an excellent base for Singpu Chemicals and the Company has since grown to become a major chemical raw materials producer in the PRC.
“Singpu Chemicals has enjoyed phenomenal success in the PRC, and the opportunities facing the Company going forward are tremendous. With our new medium-term Strategic Business Plan, we have every intention of extending our reach and entrenching our dominance,” said Mr Chan.
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