Dec 15 2010
Keyuan Petrochemicals, Inc. (Nasdaq: KEYP) ("Keyuan or the "Company"), a leading merchant manufacturer of various petrochemical products in China, announced a plan to expand its design production capacity by approximately 30% from 550,000 to 720,000 metric tons (MT) per year.
"Our team designed our manufacturing facilities in order to balance time to market and operational efficiency," explained Chungfeng Tao, Chairman and Chief Executive Officer of Keyuan. "Initially, using our proprietary catalytic pyrolysis technology, the Company built a facility capable of producing 550,000 metric tons of petrochemicals per annum, serviced by heavy oil feedstock. Our flexible production process and design allow us to change the mix of feedstock to maximize production volumes, sales and profits. This attribute has enabled us to produce and sell approximately 482,000 MT of petrochemical products in the first three quarters of 2010, or 17% above the original 550,000 MT design capacity on an annualized basis."
Keyuan expects to spend approximately $3.8 million to upgrade the catalytic pyrolysis processing equipment used in its existing production facilities. The Company has started the design work and installation is scheduled to begin in March 2011. Once the installation and annual maintenance is completed by the end of the second quarter of 2011, Keyuan's design capacity will increase to 720,000 MT per year.
| Existing Design Capacity (1) |
Est. Production/Sales Volume for 2010 (2) |
Design Capacity April 2011 (1) |
Est. Production/Sales Volume for 2011 (3) |
2010 Revenue Guidance (2) |
2011 Revenue Guidance (3) |
| 550,000 MT |
660,000 MT |
720,000 MT |
740,000 MT |
$550 million |
$660.5 million |
(1) Assumes 100% use of heavy oil as feedstock
(2) Assumes feedstock input of 70% heavy oil and 30% other feedstock (i.e. mainly light oil and benzene)
(3) Assumes feedstock input of 70-80% heavy oil and 20-30% other feedstock (i.e. mainly light oil and benzene)
The Company can increase overall production volume greater than its design capacity for heavy oil if it mixes other feedstock (mainly light oil) with heavy oil. Selection of feedstock may vary based on production plan and the availability of feedstock.
"We are excited to begin the next phase of our expansion," continued Chungfeng Tao, Chairman and Chief Executive Officer of Keyuan. "Having built a scalable facility managed by a capable team, we are confident in our ability to further expand our capacity, while optimizing our production capabilities to drive incremental revenue and earnings growth in 2011."