High performance polymer solutions supplier, Victrex, has announced the joint-venture between its subsidiary, Victrex Hong Kong and Yingkou Xingfu Chemical Company.
Together the two companies aim to build and operate a new PolyEther Ether Ketone (PEEK) polymer manufacturing facility in Liaoning, China. This new project is however subject to certain performance conditions such as finalising land purchase and permit applications.
Victrex will be the majority partner and lead the joint-venture and hopes to benefit through further differentiation its portfolio of PEEK and PolyArylEtherKetone (PAEK) grades. Victrex anticipates a range of significant long-term growth opportunities across several end markets in China, as well as aligning with China’s ‘Made in China 2025’ initiative, where specifying domestically produced PEEK in certain applications is expected to gain momentum.
Victrex has an established relationship with its joint-venture partner through its monomer supply chain, with Yingkou Xingfu having significant experience of developing and operating chemical facilities in China which meet international quality, process and environmental standards.
Victrex’s share of the overall investment, the majority of which comprises capital investment during construction, is expected to total £32m funded in cash, with approximately £28m of capital expenditure and £4m of start-up costs, with commissioning of the facility anticipated in early 2022. The new plant will eventually be capable of producing up to 1,500 tonnes1 per annum, based on anticipated annual nameplate capacity.
Jakob Sigurdsson, chief executive, Victrex said: “This investment is in line with our record of not only investing ahead of demand, but in complementing and further differentiating our range of PEEK and PAEK grades, as well as setting the stage for specific geographic growth, whereby we can capitalise on the significant opportunities in China and the Asia Pacific region by having a competitive manufacturing presence there.”
Sigurdsson added: “Alongside the ‘Made in China 2025’ initiative, some of our increasingly diverse application areas mean our customers require a quality and differentiated PEEK offering. While we already manufacture a range of PEEK and PAEK grades, this will enhance our portfolio, making us even better positioned in a region where we have seen strong growth in recent years and continue to see attractive opportunities, aligned to our know-how and strong technical and application development capabilities. Overall, we believe this is a good entry point to a China manufacturing operation, working with an established partner and offering an attractive returns profile.”
Victrex Hong Kong will be the majority partner with a 75% share. Once the facility is operational, leadership will be by Victrex.