This document provides an industry sector analysis of the petrochemical industry in East China. It summarizes that East China accounts for 27% of China's total petrochemical output and is a promising market for US equipment, technology, and engineering services. The top 7 petrochemical complexes in the region are described. The US commands 25% of the market for imported technology and equipment in East China, with annual sales of around $25 million. The Chinese appreciate the quality of US products and are open to partnerships with US suppliers.
This document provides an industry sector analysis of the petrochemical industry in East China. It summarizes that East China accounts for 27% of China's total petrochemical output and is a promising market for US equipment, technology, and engineering services. The top 7 petrochemical complexes in the region are described. The US commands 25% of the market for imported technology and equipment in East China, with annual sales of around $25 million. The Chinese appreciate the quality of US products and are open to partnerships with US suppliers.
This document provides an industry sector analysis of the petrochemical industry in East China. It summarizes that East China accounts for 27% of China's total petrochemical output and is a promising market for US equipment, technology, and engineering services. The top 7 petrochemical complexes in the region are described. The US commands 25% of the market for imported technology and equipment in East China, with annual sales of around $25 million. The Chinese appreciate the quality of US products and are open to partnerships with US suppliers.
This document provides an industry sector analysis of the petrochemical industry in East China. It summarizes that East China accounts for 27% of China's total petrochemical output and is a promising market for US equipment, technology, and engineering services. The top 7 petrochemical complexes in the region are described. The US commands 25% of the market for imported technology and equipment in East China, with annual sales of around $25 million. The Chinese appreciate the quality of US products and are open to partnerships with US suppliers.
Industly Sector Analysis Pet China China 1993 Iindustly in East Reports provided by: International Trade Administration, Office of the PRe and Hong Kong Distributed by and in cooperation with: Information is our business. u.s. DEPARTMENT OF COMMERCE Technology Administration National Technical Information Service Springfield, VA 22161 (703) 487-4650 REPRODUCED BY NATIONAL TECHNICAL INFORMATION SERVICE u.s, DEPARTMENT OF COMMERCE SPRINGFiElD, VA. 22161 National Technical Information Service Abstract China Industry Sector Analysis: Petrochemical Industry in East China China's economy is one of the world's fastest growing. In 1992, U.S. firms exported nearly $7.5 billion to China, an increase of 16 percent as compared to 1991. U.S. Foreign Commercial Service officers in China prepare market surveys for selected Chinese industry sectors which offer the best sales prospects for American firms. Industry Sector Analyses (ISAs) contain statistical and narrative information on projected market demand, end-users, best prospects, receptivity of Chinese consumers to U.S. products, and the competitive situation (domestic production, total imports, U.S. market position, and competitive factors), and market access (distribution and business practices, and financing). ISAs also contain key contact information. INDUSTRY SUBSECTOR ANALYSIS COUNTRY: CHINA POST: SHANGHAI ANALYST: ROSEMARY GALLANT A. SUMMARY: SUBSECTOR: PETROCHEMICAL INDUSTRY IN EAST CHINA ITA INDUSTRY CODE: CHM DATE PREPARED: JUNE 15, 1992 This is a regional sectoral report focusing on market opportunities for U.S. petrochemical equipment and technology suppliers in East China. The East China Consular District, comprised of the Shanghai Municipality and the provinces of Jiangsu, Zhejiang and Anhui, contains 6 of China Petrochemical Corporation's (SINOPEC's) 39 subsidiaries and the Shanghai Chemical Industrial Bureau's (SCIB's) plants, managed by the Shanghai Municipality. East China spends over USD 100 million annually on imported equipment, technology and services. with continued expansion and technical renovations planned, demand for imported technology and equipment is likely to expand to USD 130 million a year by 1995. These developments make East China a promising market for U.S. production machinery, process technology and engineering services; all areas where the United States is very competitive. The opportunities range from direct sales of equipment and catalysts, to transfer of process technologies and possible joint ventures. The report includes information on East China's principal petrochemical complexes enabling U.S chemical suppliers, equipment manufactures, engineering firms and other interested parties to contact Chinese companies directly. with an output value of USD 2.6 billion in 1991 East China produces about 27 percent of China's total petrochemical output and represents an even larger proportion of the production for some products. For example, East China produces nearly half of China's chemical fibers (767 thousand tons in 1990 for East China). The industry in East China has developed rapidly in the last ten years. Two of the seven petrochemical complexes included in this study only began production in the 1980s; Yangzi Petrochemical, China's newest and one of its largest complexes, began construction in 1984. The expansion has only been possible with the opening up of China to foreign trade after a long period of isolation. The industry has absorbed technology and equipment from allover the world. The united States commands about 25 percent of the market for imported equipment and technology in East China with roughly USD 25 million in annual sales. The Chinese appreciate the quality of American products and welcome contact with U.S. suppliers. The seven complexes in this report are: In Shanghai: In Jiangsu: In Zhejiang: In Anhui: (1) Shanghai Petrochemical Complex (Jinshan or SPC) (2) Gaoqiao Petrochemical Corporation (Gaoqiao) (3) Shanghai Chemical Industrial Bureau (SCIB) (4) Yangzi Petrochemical Corporation (YPC) (5) Jinling Petrochemical Corporation (JPC) (6) Zhenhai General Petrochemical Works (ZGPW) (7) Anqing General Petrochemical Works (AGPW). B. STATISTICAL DATA FCS Shanghai requested statistics on imports of technology and equipment from each of the plants included in this report as well as from other sources. However, in part because much is imported and exported through Beijing, and in part because many statistics are internal secrets, we were unable to obtain specific regional statistics. Company officials, annual reports, brochures, statistical yearbooks and the "Shanghai Chemical Industry" journal provided some total production figures and exports of chemical products but did not provide data on capital investment or imports of technology and equipment. The Addendum section, which provides more details on the finances, history and major products of each of the complexes in this report, contains some, albeit incomplete data. Based on discussions with each of the complexes and foreign businesspeople in the industry, FCS Shanghai estimates the share of the major equipment imports market by country from 1986 to 1991 as follows: Japan 30 Percent, United States 25 Percent, Germany 25 Percent, Italy 10 Percent, Other 10 Percent. Receptivity Score (1-5) = 4 See E. 3 on the reputation of American suppliers. C. MARKET ASSESSMENT 1. Market Demand China has invested heavily in refining capacity and in production of basic chemicals as part of its import substitution policies. Generally China now has sufficient production capacity of basic petrochemical products. Shortcomings in the industry are the limited variety of products and their variable quality. U.S. companies which offer technical improvements in these areas, rather than increasing basic production, may find market opportunities. Downstream products also offer more opportunities for joint ventures or other forms of cooperation with foreign firms. Reliance on imported equipment varies from plant to plant. Yangzi imported the majority of its production equipment and acquired licenses for foreign technology. Jinshan imported 9 2 of their 18 sets of equipment while SPC's equipment is mostly domestically sourced. American products are regarded highly, the Vnited states is a leading source of imported equipment and technology for several of the complexes. 2. End-user Profiles All of the major complexes have the authority to import and export themselves. (In China, authority to engage in foreign trade is generally limited to larger industrial companies and state trading companies.) They are large, comprehensive industrial complexes with scientific research and development centers, port and rail facilities and power generating stations in addition to production facilities. Their management is sophisticated by Chinese standards. The industry meets international standards for many of its basic products with exports from East China of at least USD 500 million in 1991. They frequently send delegations abroad for training, for technical exchanges and to inspect the plants of potential suppliers or business partners. To learn more about export opportunities, u.s. companies are encouraged to contact them. 3. Decentralization and the Market Economy in East China SINOPEC determines many production targets, purchases bulk imports and must approve major equipment purchases. Recent economic reforms however, are providing enterprises with greater autonomy and responsibility. Domestic competition is increasing as are profits through production of value-added products. A team which includes both complex representatives and SINOPEC authorities from Beijing generally negotiates joint ventures and other forms of cooperation, i.e. technology licensing for the SINOPEC subsidiaries. The complexes import catalysts, spare parts and materials needed for existing production independently. The degree of local autonomy depends on the nature of the import. For major purchases, the complexes decision-making power depends on the project category. Capital construction projects are divided into two classes, I and II. Class I are new projects and require SINOPEC approval. SINOPEC generally also has the lead in negotiating Class I projects. U.S. companies pursuing these projects should visit SINOPEC Beijing to develop good relations or "guanxi." Frequently the province where the project is located will provide investment capital in addition to SINOPEC's funding. In that case, companies should also develop good guanxi with provincial officials. Once SINOPEC approves a project, they assign it to a design institute. The complexes do have their own design institutes but if the project is particularly large or involves new technology SINOPEC may assign it to a design institute directly under SINOPEC management. u.s. companies interested in supplying a project should work closely with the design institute to ensure the design is compatible with their equipment or technology. 3 Class II projects are expansions and of existing production facilities. There is much more local autonomy on Class II projects and U.S. companies should concentrate more on cUltivating and educating the enduser. SINOPEC concurrence however, is still necessary for the final contract and thus u.s. firms should include them in networking efforts. D. Best Prospects Plans are underway for new projects and expansions to take place during the Eighth Five Year Plan, 1991-95. The petrochemical plants will seek foreign investment, technology and equipment for many of these projects. In addition to the listed projects, several of the complexes are engaged in technical renovation of existing facilities. SHANGHAI PETROCHEMICAL COMPLEX (Jinshan or SPC) Plans are underway to increase ethylene production capacity from 300,000 MT per year to 450,000 MT and to renovate the hydrogen cracker and the aromatics stripper. The following new projects are also under consideration (expected annual production in paranthesis): acrylonitrile (150,000 MT), sodium cyanide (20,000 MT), acrylic fiber (60,000 MT), ethylene glycol (100,000 MT), polyethylene (200,000 MT), styrene monomer (80,000 MT), ABS resin (60,000 MT), rubber (60,000 MT), ammonia (12,000 MT). SHANGHAI CHEMICAL INDUSTRY BUREAU (SCIB) The Bureau plans to construct the following facilities during the Zighth Five Year Plan: 1 A Plastics Auxiliaries Project (22,000 MT), total investment of RMB 150 MN (USD 30 MN). 2 Acetic Acid Plant (100,000 MT) with a total expected investment of RMB 500 MN (USD 90 MN). 3 A Cellulose Fibers Project, 50,000 MT of Cellulose and 100,000 MT of fine Methanol with a total expected investment of USD 200 MN. 4 A 50,000 MT, USD 1 MN Titannium Dioxide Pigment Project. 5 A Project to produce rubber tires for cars, trucks, agricultural equipment and mining equipment. GAOQIAO PETROCHEMICAL COMPLEX Gaoqiao is considering joint ventures to produce normal parafin (50,000-70,000 MT) to expand production of ion exchange resin (from 4,000 to 10,000 cubic meters); and to produce styrene monomer (100,000 MT) and polystyrene (50,000 MT). ANQING GENERAL PETROCHEMICAL WORKS AGPW is constructing China's first catalytic splitting plant, a RMB 2 billion investment. AGPW expects to complete it during the 9th Five-Year Plan, 1996-2000. Anqing is also planning a 4 50,000 MT acrylonitrite plant to be followed by a 50,000 MT fiber project to process the acrylonitrite. Long range plans call for AGPW to construct ABS, SBS and other resin plants. E. COMPETITIVE SITUATION 1. Role of Imports The Chinese Government maintains an import sUbstitution policy to protect and develop domestic suppliers. To the greatest extent possible, enterprises purchase domestic raw materials and equipment. In order to approve imports of equipment, the Chinese government must determine that China either does not manufacture the product or does not have sufficient supplies. Despite the protectionist pOlicies, all of the complexes have imported equipment and technology. 2. Used Equipment Used equipment imports do not enjoy a strong demand in this market. Chinese contacts contend that purchases of used equipment generally do not result in savings over the long term because of the high cost of service and spare parts. Jinshan imported one used production line from the U.S. to manufacture polyester filament. In general, however, the plant has found used equipment difficult to integrate with existing equipment. 3. U.S. Market Position and Share The Chinese appreciate the quality of American products and welcome contact with U.S. suppliers. The' united States is the second largest foreign supplier (behind Japan) and commands about 25 percent of the market for imported equipment and technology in East China with roughly USD 25 million in annual sales. The large U.S. chemical and petrochemical companies are well known in East China. For example, several plants use Lummus technology for their ethylene plants, UOP-Dupont technology for aromatics, computers from Rosemont and instrumentation from Foxboro. 4. Competitive Factors Chinese businesspeople regard quality, reputation, visibility and price as key factors in import decisions. They prefer to deal with people they know and rely heavily on face to face contact. Good "guanxi," i.e. personal relationships, are key to successful business in China. both because Chinese disclose information largely on an informal, one-on-one basis and because many business decisions hinge on personal relationships. Developing good "guanxi" can contribute to larger market share and help U.S. companies to obtain leads on plans and projects. For example, Yangzi Petrochemical receives 100 Japanese for every American businessperson. In the last 5 year they have also received nearly as many Germans and South Koreans. As a result, German and Japanese companies have performed most of Yangzi's engineering work and have supplied most of the major equipment. In other cases, the strong presence of Japanese companies has enabled them to hear about sales leads and projects plans long before plans are firm enough for pUblic dissemination. Frequently u.S. firms lack visibility and prefer to operate via telephone or fax. Early contact and good relations with the complex's technical department and the design institute are as important as developing good relationships with the purchasing department. The technical department must determine that the foreign technology or equipment is suitable for a given project before the purchasing office (the foreign trade corporation or division of the complex) can even meet officially with the potential supplier. Once the technical people agree that the foreign product is of sufficient and appropriate technology, the supplier may discuss price and financing. Generally the technical department and the design institute draft initial project proposals. Once the Ministry of Chemical Industries or SINOPEC approves the project, the design institute and the technical departments carry out a feasibility study with input from other departments including the planning and finance departments. Technical seminars for the design and technical departments are an excellent way to present the unique and competitive aspects of a company's products. Due to the importance of coordination with the design institutes and technical departments, local sources note that agents or distributors are not well-suited for this market. The Chinese companies regard agents as only interested in the next sale, not in long-term relationships. They also want to be sold on the technical aspects of a company's products and want to meet with the suppliers' engineers rather than outside salespeople. Onecompanycomplained that u.S. companies do not like to deal directly and rely too heavily on agents from Hong Kong. To the enduser, the Hong Kong agent represents higher commissions and indirect contact with the producer. In contrast, Japanese companies visit often to make sure previously installed equipment is running well, to discuss areas of possible future cooperation and to maintain the relationship. Despite these complaints, well-qualified agents or representatives from Hong Kong and increasingly, Taiwan, may be in a good position to help new-to-market u.S. companies in East China. An agent or representative in Asia can visit with customers more frequently and may be able to provide after-sales service and training at much less cost than working directly out of the united States. Taiwan in particular is a good source of agents for American firms. Taiwanese offer both technological experience from Taiwan's own petrochemical industry and linguistic f a m i l i a r i ~ y with East China. 6 Officials at each of the complexes mentioned that u.s. firms are inflexible on price. Some contacts appreciate the more straight-forward nature of American business practices vis-a-vis Japanese. However, Americans may be considered culturally insensitive if the seller did not consider the customer's desire for some give and take and did not understand the process of coming towards a mutually satisfactory agreement. The Chinese business culture emphasizes negotiation and "mutual benefit." Signing on too readily to the initial offer and terms, particularly ones from a foreign company, suggests the Chinese did not get the best deal. It must be conceded that a major impediment to equipment sales from the united states is the lack of concessionary financing. ~ u c h of the equipment sourced from other countries is financed by soft loans. In a typical example, a consortium of French companies won a USD 30 million contract for a recent SCIB project despite the united states supporting the feasibility study with a USD 600,000 grant from the Trade and Development Program. The French will supply the equipment financed by a French-Government 10 year interest-free loan with a 1 to 2 percent interest rate thereafter. Texaco and the Institute of Gas Technology from the United states will supply USD 10 million in software and technology. F. KEY CONTACTS Mr. Xiang Zhong Fu Director and President China Jinshan Associated Trading Corporation Tel: 86-21-794-0935 Fax: 86-21-794-2248 Jinshan Hotel Jinshanwei Shanghai 200540 China Mr. Zhao HongJie Director, Foreign Affairs China Jinshan Associated Trading Corporation Tel: 86-21-794-1888 Fax: 86-21-794-0687 Jinshan Hotel Jinshanwei Shanghai 200540 China Mr. Qian Shouren General Manager Shanghai Gaoqiao Petrochemical International Trade Co. TEL: 884-6482 x 8831 FAX: 884-6359, 884-6481 2908 PUdong Da Dao, Pudong Shanghai, 200129 China Ms. Wang Shanjuan Vice General Manager TEL: 884-6482, 884-7636 FAX: 884-6359, 884-6481 Shanghai Gaoqiao Petrochemical International Trade Co. 2908 PUdong Da Dao, Pudong Shanghai, 200129 China Mr. Liu Junan General Manager Nanjing Yangzi Petrochemical International Trading Company Dachang District, Nanjing, Jiangsu Province, China TEL: (025) 784329 TLX: 34158 YPCGH CN FAX: (025) 791662 Mr. Li Sibin Manager, Senior Engineer Nanjing Yangzi Petrochemical International Trading Company, Business Dept. No. 2 Dachang District, Nanjing, Jiangsu Province, China TEL: (025) 784323 TLX: 34158 YPCGH CN FAX: (025) 791662 Mr. Kong Linmei Nanjing Yangzi Petrochemical International Trading Company, Business Dept. No. 1 Dachang District, Nanjing, Jiangsu Province, China TEL: (025) 784321, 783290 TLX: 34158 YPCGH CN FAX: (025) 791662 Mr. Wang Shou Yuan Vice General Manager Jinling Petrochemical Import & Export corporation Address: 78 Suo Jin Cun, Nanjing, 210042 China TEL: (025) 504361 FAX: (025) 502925 Mr. Wu Jin Li Director of Development SINOPEC Jinling Petrochemical Corporation Address: 78 Suo Jin Cun, Nanjing, China TEL: (025) 654567 Mr. Xu yin Yao ZPGW Shanghai Representative Office Room 503, 33 Jiujiang Road, Shanghai 200002 China TEL: 329-0352, 323-1869 Mr. Sheng Zhen Wei ~ r . Fen Chuan Wei Anqing City Government, Shanghai Representative Office #14 1670 Lane, Huaihai Zhong Road, Shanghai 200031 China TEL: 4371033 Mr. Huang Wen Wei, General Manager Corporation of Shanghai Chemical Industry Foreign Economic and Technological Cooperation 110 Hankou Road, Shanghai, 200002 China TEL: 321-7879 fax 321-6107 . 8 Ms. Shen Li Ping Shanghai Chemical Industry Bureau Director, Foreign Trade Office 110 Hankou LU, Shanghai 200002 China TEL: 321-0902 fax 321-6107 Kang Zhiwei General Manager, First Division China National Technical Import/Export Corporation Beijing Exhibition Center Hotel 135 xi Zhimenwai Street Beijing, China TEL: 8316633-5201 CNTIC has been responsiblefor large scale purchases and World Bank projects Sinopec International Corporation Liaison Department Manager NO.2, 5th District Heping Li Beijing, China Tel: 4217744 ext 318 G. Trade Promotion Opportunities The major trade show for the industry is the annual International Chemical Industry Fair. The International Chemical Industry Fair 1992 (ICIF '92) will be held August 18-23 in Beijing at the China International Exhibition Center. The organizer is the International Exchange Center of the Ministry of Chemical Industry. For further information, contact Mr. Zhou Jianguo, telephone (861) 422-6622 ext. 3212 or fax (861) 421-4052. Companies may also advertise in the "shanghai Chemical Industry," a journal published by the Shanghai Chemical Industry Bureau. For further information, please contact the Director of the Foreign Trade Office at the Bureau, Ms. Shen Liping, tel: (8621) 321-0902, or fax (8621) 321-6107. H. ADDENDUM The following is an introduction to the petrochemical complexes in the East China Consular District. 1 SHANGHAI PETROCHEMICAL COMPLEX: Shanghai Petrochemical Complex (SPC), also known as Jinshan Petrochemical, is a 12 square kilometer complex located south of Shanghai at the Hangzhou Bay of the East China Sea. SPC began operation in 1978 and has 64,000 employees. The Central 9 Government financed SPC'S first stage (1972-78) and loaned SPC the funds for the second stage (1978-86). SPC itself financed the RMB 35 billion third stage (1986-91) borrowing some funds from foreign banks and raising the remainder through the sale of domestic bonds. SPC is China's fifth largest corporation in value of sales and is China's largest producer of polyester fiber. Jinshan exported USD 28 million worth of chemicals in 1989 and USD 44 million in 1990. Of the sixteen production units in SPC's first stage, seven used Japanese equipment (including one using u.s. technology), eight used Chinese equipment and one used German equipment. Of the.ten units in the second and third stages, three employed u.s. technology and Chinese.or third country equipment, only one used u.s. equipment. Japanese and Italian export credits and concessional loans funded equipment from those respective countries for the remaining units from . SPC'S ANNUAL PRODUCTION Ethylene: (450,000 MT) Polypropylene: (140,000 MT) Low Density Polyethylene: (80,000 MT) Polyester Chips: (100,000 MT) Staples (90,000 MT) Ethylene Glycol: (120,000 MT) 2. SHANGHAI GAOQIAO PETROCHEMICAL CORPORATION Established in November 1981, Shanghai Gaoqiao Petrochemical Corporation (Gaoqiao) covers an area of 312 hectares in the Shanghai Pudong Economic Development Zone and has 22,000 employees. For several years Gaoqiao has been Shanghai's number one exporting enterprise (USD 78 million in 1990). All of Gaoqiao's primary production equipment is China-made. 1991 assets were RMB 1.1 billion. In 1990 the company also received 600 foreign visitors. Gaoqiao has an annual crude oil processing capacity of 7.5 million metric tons (MMT) and is .integrated with 30 refining units, 20 organic chemical units and a power generating station. Gaoqiao recently completed a 2.5 MMT per year atmospheric and vacuum distillation plant and support facilities. A 50,000 MT per year polybutadienerubber unit, a 20,000 MT per year polyether unit and a 20,000 MT per year propylene oxide unit are under construction. Gaoqiao produces 300 products. The main products are gasoline, kerosene, diesel oil, jet fuel, various brands of lUbricating oil, wax, petroleum coke, asphalt, ethylbenzene, propylene glycol, phenol, acetone, polybutadiene rubber, industrial detergent, polyether, acrylic fiber, acrylonitrile, and tertiary butanol. 10 In November 1991, Gaoqiao and CALTEX (A Texas-based corporation formed by Chevron and Texaco) started a USD 2 million joint venture to produce lUbricating oil for vehicles and ships. Initial production will be 5,000 MT per year, increasing to 50,000 MT per year by 1995. Gaoqiao has signed an letter of intent with Transworld Oil (USA) to establish an oil refining plant, and is currently conducting a feasibility study on the project. Gaoqiao also has joint ventures with German and Hong Kong companies. 3. SHANGHAI CHEMICAL INDUSTRY BUREAU (SCIB) The Shanghai Chemical Industry Bureau administers 146 industrial enterprises, of which 116 are state-owned. The remaining 30 are smaller, collectively-owned enterprises. SCIB also includes 16 independent design and research institutes. There are 147,000 employees in the Bureau of which 11,300 (8%) are technical personnel. In 1990, SCIB'S total industrial output value was RMB 6 billion Yuan (USD 1.1 billion). SCIB turned over 1.5 billion RMB (USD 0.3 billion) in profits and taxes. Total assets are valued at RMB.3.1 billion. 1990 and 1991 exports reached USD 173 million and USD 210 million .. SCIB has ten product divisions: chemical raw materials, plastics, dyestuffs, pesticides, coatings and pigments, rubber products, chemical fertilizers, chemical equipment, coking and coal Chemistry, and chemical reagents. SCIB offers more than 6,000 products with 30,000 specifications. The main products include: chemical fertilizers, pesticides, organic chemical raw materials, acids and alkalies, inorganic salts, synthetic resins,pigments, and chemical reagents. Since 1983, SCIB has imported equipment and technology over USD 300 million including more than USD 50 million of American equipment. six of the SCIB's ten joint ventures are with American companies including: DuPont (pesticides); Cabot (carbon black); and Union Carbide and Allied Signal (molecular sieves). The Bureau is interested in additional relationships with.the U.S. chemical industry. 4. YANGZI PETROCHEMICAL CORPORATION: Yangzi Petrochemical (YPC) is SINOPEC's newest and one of its largest complexes. YPC's development and construction has been extremely rapid. The company was formed in September 1983. Construction began in June of 1984 and finished in 1990. YPC has more than 20,000 employees. The complex is composed of 10 major sets of production equipment. YPC has its own electric plant and water supply to enable constant.operation. Crude oil is piped directly from Shengli oilfield in Shandong Province. YPC operates its own 10-wharf port facility and its own railway depot and link to the Shanghai-Beijing railway line. In 1991 YPC had successful test runs on several of the production lines installed in 1990 and 1991. 11 First phase projects initiated in 1987 included an ethylene plant (300,000 MT annual capacity), a polyethylene plant (140,000 MT), an ethylene glycol plant (200,000 MT) and an atmospheric and vacuum distillation plant (3 million MT). Second phase projects included an aromatics complex (450,000 MT), a purified terephthalic acid (PTA) plant (450,000 MT), an acetic acid plant (70,000 MT) and a vacuum residue plant. YPC has purchased equipment and technology licenses from a number of u.S. companies. The ethylene plant uses Lummus technology, the aromatics section uses UOP and Unicorp equipment, .MTA uses Amoco technology, the urea plant uses Chevron technology, the pilot plant for polypropylene signed an agreement with Stubbs, Overbeck and Associates for engineering and equipment, the delayed coking plant uses a Dresser pump. In addition, YPC directly imports over USD 1 million per year in catalysts and. spare parts from the united States. with all their basic lines now operating successfully, YPC is looking towards downstream products. The company welcomes joint ventures in new product areas such as jet oil, chemical fibers, PBT and SM. YPC is already producing the inputs for these products. 5. JINLING PETROCHEMICAL CORPORATION: Jinling Petrochemical Corporation (JPC) is located in northeast Nanjing, along the Beijing-Shanghai Railway. It has 23,000 employees and assets of RMB 1.1 billion. In addition to self-raised funds, it receives funds from SINOPEC and local banks. JPC's exports reached USD 105 million worth of products in 1989 and USD 107 million in 1990. JPC imports most of its equipment from Japan, the united States, Canada and Western Europe and imports crude oil from the Middle East. It has no formal purchase or expansion plans. 6. ZHENHAI GENERAL PETROCHEMICAL WORKS Zhenhai General Petrochemical Works (ZGPW) is north of Ningbo in Zhejiang Province, on the coast of the East China Sea. ZGPW has over 8,000 employees, of whom 20 percent are engineers and technicians, onits 11 square kilometers. ZGPW exported USD 59 million worth of products in 1989 and USD 74 million in 1990. ZGPW annually processes 3 million MT of crude oil and produces 300,000 MT of synthetic ammonia and 520,000 MT of urea. Other products include: 90# Motor Gasoline, Regular Leaded Gasoline for export, 1# Naphtha, 2# Lamp Kerosene, 0# Diesel oil for export, 10# Building Asphalt and Sulphur. During the EightnFive Year Period the company plans to invest RMB 4.3 billion to develop more downstream production facilities, relying on three sources of funding, ZGPW itself, SINOPEC, and Zhejiang Province. 12 7. ANQING GENERAL PETROCHEMICAL WORKS: Anqing General Petrochemical Works (AGPW) is situated in Anqing, Anhui Province. AGPW began operation in 1979 and now employes 12,000 people on its 400 hectare site. Major facilities include a crude oil refinery (3 million MT annual processing capacity), a chemical fertilizer plant (300,000 MT of synthetic ammonia and 520,000 MT of urea) and a thermal power plant with an installed capacity of 150,000 KW. 13