NINGBO, China, Dec. 14, 2010 /PRNewswire-Asia-FirstCall/ -- 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)
(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)
Please note: 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."
About Keyuan Petrochemicals, Inc.
Keyuan Petrochemicals, Inc., established in 2007 and operating through its wholly-owned subsidiary, Keyuan Plastics, Co. Ltd., is located in Ningbo, China and is a leading independent manufacturer and supplier of various petrochemical products. Having commenced production in October 2009, Keyuan's operations include an annual petrochemical manufacturing design capacity of 550,000 MT for a variety of petrochemical products, with facilities for the storage and loading of raw materials and finished goods, and a technology that supports the manufacturing process with low raw material costs and high utilization and yields. In order to meet increasing market demand, Keyuan plans to expand its manufacturing capacity to include a SBS production facility, additional storage capacity, a raw material pre-treatment facility, and an asphalt production facility.
Safe Harbor Statement
This press release includes statements that may constitute forward-looking statements made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. For example, statements about the future use of the proceeds are forward looking and subject to risks. Keyuan Petrochemicals, Inc. may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission on forms 10-K, 10-Q and 8-K, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, risks outlined in the Company's filings with the U.S. Securities and Exchange Commission, including its registration statement on Form S-1, as amended. The Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.
For more information, please contact:
HC International, Inc.
Ted Haberfield, Executive VP
SOURCE Keyuan Petrochemicals, Inc.