announced that its Thai subsidiary Vinythai (in which holds a 58.8% stake) will construct a new epichlorohydrin plant in Taixing (China), which will have an initial capacity of 100kt and should be operational in the second half of 2014.
Unsurprisingly the new plant will be based on the company’s proprietary Epicerol technology, on which has about 1000 patent titles and which the company claims is having a 60% lower CO2 balance vs competing technologies, while also requiring less invested capex.
believes that the Chinese epichlorohydrin market is growing at about 8% per annum while China is expected to represent 35% of the total world market by 2016. Epichlorohydrin is mainly used for the production of epoxy resins, which are used in coatings, wind mills, aerospace and electronics applications.
Our View:
is aggressively developing its epichlorohydrin production footprint. The new plant will increase the company’s global epichlorohydrin production capacity by about 25% at least vs existing capacity+already announced investments. Based on investment projects announced today and in the past few years, we believe the company’s Epichlorohydrin production capacity will have quadrupled by 2015 vs 2011. claims that the new plant will make Vinythai the second largest epichlorohydrin producer in Asia.We welcome the expansion of the epichlorohydrin footprint, in which for sure has a promising technology. No change to our Accumulate rating and € 105 target price though.