Hengli Petrochemical, a Chinese polyester manufacturer is planning to add additional two 2.5 million metric ton per year purified terephthalic acid (PTA) production unit in south China.
The new units’ operations are scheduled to start at the end of 2021.
Hengli will invest about 11.5 billion yuan ($1.69 billion) to build the units in the Daya bay petrochemical park at Huizhou in Guangdong province, subject to governmental approvals.
The two units will take Hengli’s total PTA production capacity to 16.6 million metric ton per year, making it China’s top producer ahead of current market leader Yisheng Petrochemical.
Hengli currently operates five PTA production units in Dalian, the site of its 400,000 barrel per day Changxing Island refinery.
The company intends to put up 3.18 billion yuan ($470 million) in cash and finance the remaining costs of the new units through bank loans.
The announcement by Hengli adds to the surge of investments by Chinese private-sector companies in the currently oversupplied markets of PTA and downstream polyethylene terephthalate (PET).
In September, Hengli’s competitors such as Yisheng, Sanfangxiang Petrochemical and Dongying United Petrochemical have all announced plans to expand production capacity.