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  • Key Elements of the Medium-Term Strategic Business Plan (MTSBP I)

    Doubling of Chlor-alkali and Aniline Capacities ("PP4")

    To meet the rising demand for chemicals as the PRC continues to establish itself as a manufacturing hub, SP Chemicals has constructed a new chlor-alkali facility, which is housed within our existing chemical facility at China Fine Chemical Industry Taixing Park ("Taixing Park") in Jiangsu Province.

    Construction of the chlor-alkali plant commenced in 1Q 2005. Since May 2006, we successfully doubled our chlor-alkali and aniline production capacities in what we term as
    our Production Phase Four Expansion Plans ("PP4"):

    • Caustic soda: from 150,000 tonnes to 300,000 tonnes
    • Chlorine: from 132,000 tonnes to 264,000 tonnes
    • Aniline: from 45,000 tonnes to and 90,000 tonnes
    PP4 has been operating at full capacity since 3Q 2006. The additional supply of aniline and caustic soda allows SP 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 the Group's new product - VCM.

    Construction of Co-generation Plant

    In anticipation of the demand for electricity needed to support the Company's growth, SP Chemicals has constructed a 120 MW Co-generation plant aimed at reducing SP Chemicals' energy costs, and improving the Group's competitiveness.

    With many parts of the PRC experiencing power shortages due to unprecedented levels of growth in the country, SP Chemicals' Co-generation plant is expected to fulfill 100% of the Group's energy requirements, up to our PP4 capacity expansion.

    To ensure efficient transportation of coal needed for the smooth operations of the Co-generation plant, SP Chemicals has constructed a new coal jetty with a handling capacity of 35,000 tonnes of coal, which has been operational since February 2006.

    Construction of a New VCM Plant

    An estimated US$90 million has gone into the construction of a new VCM plant, including auxiliary facilities to support an annual production capacity of 200,000 tonnes of VCM, based on direct chlorination process and oxychlorination process. The VCM plant is located on a reserved 1 sq km site within SP Chemicals’ flagship chemical facility located in the Taixing Park .

    Separately, the Group also constructed a new chemical raw materials jetty which has a handling capacity of 25,000 tonnes of liquid chemicals to be used to transport ethylene, a feedstock for the production of VCM, as well as to deliver VCM and caustic soda to customers.

    The venture into the VCM business is part of SP Chemicals’ ongoing strategy of moving further into downstream products that will complement our existing product range.

    VCM is predominantly used as the main raw material for the manufacture of PVC, which is a versatile resin and one of the oldest established plastics.

    In the PRC, demand for PVC is expected to grow in industries such as construction (pipes, window and door frames, flooring tiles), packaging, consumer goods (foamed leather cloth, curtains, tarpaulins), automotive, and also for medical use (blood bags).

    Commercial operation has commenced since 4Q FY2007 .


    Key Elements of the Medium-Term Strategic Business Plan II (MTSBP II)

    Production Phase Five Expansion Plans ("PP5")

    With the successful implementation of our MTSBP, the Group announced our PP5 in December 2006, which aims to drive our growth further and faster. With PP5, the Group's annual production capacities for caustic soda, chlorine, and aniline, has increased to 450,000 tonnes (from 300,000 tonnes), 396,000 tonnes (from 264,000 tonnes), and 135,000 tonnes (from 90,000 tonnes), respectively.

    PP5 started commercial operation in March 2008

    Styrene Monomer Production Facility

    SP Chemicals has identified a market opportunity for styrene monomer, an intermediate raw chemical used in wide range of consumer and industrial applications such as polystyrene plastics, protective coatings, polyesters and resins.

    According to the PRC Styrene Monomer Association, only about 48.5% of the domestics demand for styrene monomer is met locally. Total imports of styrene monomer in 2006 amounted to 2.3 million tonnes. Market research estimates that by 2010, the estimated consumption of styrene monomer in China could reach 7 million tonnes per annum.

    Recognizing the huge demand for this product in the PRC and the corresponding supply shortage, we are in an advantageous position to enter this market, given our strategic location in Taixing’s China Fine Chemical Industrial Park which has a ready pool of potential customers.

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