ROTTERDAM, Netherlands and HONG KONG, Dec. 23, 2019 /PRNewswire/ -- LyondellBasell (NYSE: LYB), one of the largest plastics, chemicals and refining companies in the world, today announced it has signed a Memorandum of Understanding (MoU) to form a 50:50 joint venture (JV) with China Petroleum & Chemical Corporation (Sinopec), one of the largest integrated energy and chemical companies in China.
Under the non-binding MoU, the JV will construct a new propylene oxide (PO) and styrene monomer (SM) unit in Zhenhai, Ningbo, China to serve that country's domestic market. Once finalized, this JV will build upon the existing LyondellBasell / Sinopec PO / SM joint venture in the same location, which operates under the name Ningbo ZRCC Lyondell Chemical Company Limited.
"Joint ventures in strategic regions are an important part of our growth strategy," said Bob Patel, CEO of LyondellBasell. "As demand for construction materials, packaging and furnishings continues to grow, we see an opportunity to bring together our leading technology with Sinopec's operational capabilities to further serve the Chinese market."
"This cooperation on the second PO / SM unit between Sinopec and LyondellBasell is based on the successful partnership of the first unit," said Dai Houliang, Chairman of Sinopec. "It is in line with China's further opening-up policy, and is another achievement of international cooperation of Sinopec. The products will help meet the increasing demands from the domestic market."
"The formation of this JV with Sinopec, a highly respected Chinese company and an existing PO / SM partner, allows us to take advantage of the fastest growing market in the world for these products," said Torkel Rhenman, Executive Vice President of LyondellBasell. "We see tremendous opportunity to create additional value and grow the presence of LyondellBasell in this very important market."
The new facility is expected to produce 300 kilo tons per annum (KTA) of PO and 600 KTA of SM. Construction of the facility will begin in early 2020 with start-up expected in 2022. The facility will use LyondellBasell's leading PO / SM technology. Products produced will be marketed equally by both companies which will significantly expand their respective participation in the Chinese market for both PO and SM.
According to IHS Markit, China makes up more than 60 percent of the Asian chemicals market demand and represents 40 percent of global chemicals growth over the next decade. PO and SM are core products for LyondellBasell.
LyondellBasell operates five wholly-owned facilities in China which are located in Guangzhou, Suzhou, Dalian, Dongguan and Changshu. In addition, LyondellBasell is currently building the largest next generation PO / tertiary butyl alcohol (TBA) plant in the world near Houston, Texas.
LyondellBasell (NYSE: LYB) is one of the largest plastics, chemicals and refining companies in the world. Driven by its employees around the globe, LyondellBasell produces materials and products that are key to advancing solutions to modern challenges like enhancing food safety through lightweight and flexible packaging, protecting the purity of water supplies through stronger and more versatile pipes, improving the safety, comfort and fuel efficiency of many of the cars and trucks on the road, and ensuring the safe and effective functionality in electronics and appliances. LyondellBasell sells products into more than 100 countries and is the world's largest producer of polymer compounds and the largest licensor of polyolefin technologies. In 2019, LyondellBasell was named to Fortune magazine's list of the "World's Most Admired Companies." More information about LyondellBasell can be found at www.LyondellBasell.com.
The statements in this release relating to matters that are not historical facts are forward-looking statements. These forward-looking statements are based upon assumptions of management which are believed to be reasonable at the time made and are subject to significant risks and uncertainties. Actual results could differ materially from the projections, anticipated results, or other expectations expressed in this release, including, but not limited to, our ability to complete the transaction described or the timing of such transaction; our ability to obtain all necessary regulatory approvals; our ability to successfully construct and operate the proposed facilities described in this release; and general economic conditions in geographic regions or markets served by LyondellBasell and its affiliates, or where operations of the company and its affiliates are located. While these statements and projections are made in good faith, LyondellBasell and its management cannot guarantee that anticipated future results will be achieved. Additional factors that could cause results to differ materially from those described in the forward-looking statements can be found in the "Risk Factors" section of our Form 10-K for the year ended December 31, 2018, which can be found at www.LyondellBasell.com on the Investor Relations page and on the Securities and Exchange Commission's website at www.sec.gov. LyondellBasell assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made, whether as a result of new information, future events, or otherwise.