INEOS has signed four deals that will significantly reshape – and strengthen – its business in China.
INEOS Chairman and Founder Sir Jim Ratcliffe said the joint ventures with state-owned SINOPEC would establish ‘a very large footprint’ for INEOS in China.
“Both parties recognise the potential for closer collaboration across a number of other areas as we look ahead,” he said.
SINOPEC has agreed to sell a 50% stake in Shanghai SECCO Petrochemical Company Limited to INEOS.
The Chinese company is currently capable of producing 4.2 million tonnes of vital raw materials including ethylene, polystyrene and acrylonitrile.
In addition, INEOS and SINOPEC have agreed to form two joint ventures to increase production of high-density polyethylene (HDPE) and acrylonitrile-butadiene-styrene (ABS) to meet China’s rapidly growing domestic market.
As part of the ABS joint venture, SINOPEC will acquire a 50% stake in INEOS Styrolution’s Ningbo plant, which is currently being built and expected to become operational next year.
“INEOS Styrolution has come a long way from being a joint venture itself in its early years,” said CEO Steve Harrington.
“After acquisitions and investing into new greenfield production sites, setting up this joint venture with a strong partner in China feels like the natural next step for growth.
“This collaboration with SINOPEC allows us to continue to grow in China in fast-forward mode.”
INEOS Styrolution and SINOPEC also plan to build two additional ABS plants, based on INEOS’ world-leading technology.
One will be in Tianjin where the two companies also intend to build a new HDPE plant to manufacture high density polyethylene.
Long-term they hope to build at least a further two HDPE plants.
INEOS and SINOPEC have also announced a joint venture agreement that will see INEOS acquire a 50% share in the existing Tianjin Nangang Ethylene Project from SINOPEC.
The project is currently building a 1.2 million tonne ethane cracker, expected to come on-stream at the end of 2023, and downstream derivative plants in Tianjin.
INEOS and SINOPEC have worked together for years.
“Through this close relationship SINOPEC gains access to some of the best downstream technology in the world from INEOS and INEOS achieves a substantial presence in China, which is the fastest-growing market in the world,” said Jim.
In 2013 INEOS began building the largestever acetone and phenol production plant in China after signing a joint venture with SINOPEC Yangzi Petrochemical Company.
And last year INEOS inherited a joint venture with SINOPEC after it bought BP’s global acetyls and aromatics business for $5 billion.