Mitsui Chemicals and Sinopec Reach Fundamental Agreement to Form a Joint Venture in Phenol

November 2, 2009
Mitsui Chemicals, Inc.
China Petroleum & Chemical Corp.

Mitsui Chemicals, Inc. with its Head Office in Tokyo, Japan (hereinafter referred to as “MCI”) (Toshikazu Tanaka, President & CEO) and China Petroleum & Chemical Corp. with its head office in Beijing, China (hereinafter referred to as “Sinopec”) (Wang Tianpu, President)reached a partnership agreement for a joint venture in phenol, the raw material for production of Bisphenol A (BPA) which is currently being produced and sold by the two companies’ equal investment joint-venture, Shanghai Sinopec Mitsui Chemicals Co., Ltd. (hereinafter referred to as “SSMC”)

The two companies – MCI as the largest phenol producer in Asia and Sinopec as the largest phenol producer in China, in consideration of increasing international competition in this product area, have decided to form a strategic alliance to continue to as a leader in the Asian market. This “win-win” collaboration will form a top level world-class phenol alliance. The venture will accelerate establishment of a new phenol plant and conjoin Sinopec’s Shanghai Gaoqiao Company phenol plant into its operations. These new operations will serve to further reinforce competitiveness of the current joint venture which commenced commercial operations in January 2009 and is scheduled to produce 120,000 tons of BPA a year.

The two companies are scheduled to submit an environmental proposal to the Ministry of Environmental Protection by the end of the current fiscal year for the planned commercial operation of the new plant in 2013.

Outline of Phenol Joint Venture

1.LocationShanghai Petrochemical Area, China
2.Investment50:50 (same investment ratio as SSMC)
3.Production CapacityNew Plant: Phenol 250,000 tons/year
Acetone 150,000 tons/year
Note: In addition, Sinopec’s Shanghai Gaoqiao Company plant (phenol 125,000 tons/year, acetone 75,000 tons/year) will be conjoined with SSMC. SSMC’s total annual phenol production capacity will be 375,000 tons, acetone 225,000 tons, and BPA 120,000 tons.
4.New Plant Process (Phenol Process)Mitsui Chemicals technology
5.Commercial Operation Second Quarter of 2013