Kingfa Technology intends to acquire a 51.09% stake in Bora New Materials to enter the upstream raw material industry such as ABS

According to the announcement, Baolai New Materials was established in January 2020.
Its business scope includes sales of ABS resin, polyethylene, polypropylene, and polystyrene; import and export of goods and technologies
.
(For projects subject to approval according to law, business activities can only be carried out after approval by relevant departments
.
)

Baolai New Materials is building a project with an annual output of 600,000 tons of ABS and its supporting devices.
The project land has been processed for real estate property rights and construction land planning licenses according to law.
Approval procedures for construction project safety conditions review, energy conservation assessment review,
etc.
The total investment (excluding value-added tax) of the project submitted for approval is 10.
687 billion yuan, of which construction investment (excluding value-added tax) is 10.
259 billion yuan
.
The project started construction on June 15, 2020, with a planned construction period of 2 years
.
Project construction includes 600,000 tons/year ABS unit, 600,000 tons/year propane dehydrogenation (PDH) unit, 260,000 tons/year acrylonitrile (AN) unit, 100,000 tons/year methyl methacrylate (MMA) unit installations and supporting projects
.

According to the Feasibility Study Report prepared by the Jilin Design Institute of CNPC Northeast Refining and Chemical Engineering Co.
, Ltd.
, China's ABS resin has been in short supply for a long time.
In 2019, the apparent consumption of ABS resin exceeded 6.
05 million tons, and the production capacity self-sufficiency rate was about 67%.
Imports of ABS resin from Taiwan and South Korea exceed 2 million tons per year
.
It is estimated that the apparent consumption of ABS resin will be 7.
9 million tons in 2030, and 1 million tons of ABS resin will still need to be imported per year
.
According to the project design plan, the ABS, acrylonitrile, and MMA units of the project adopt domestic advanced technologies such as PetroChina, and the PDH unit adopts the American Lummus technology
.
The production process of ABS emulsion grafting-bulk SAN blending method is relatively flexible.
Through the improvement of local process technology and optimization of process formula, the production capacity and quality of the entire device can be upgraded
.
In terms of raw material supply, the main raw materials of this project, styrene and butadiene, are planned to be supplied by the "partition wall" of Bora LyondellBasell Petrochemical Company.
The upstream and downstream integration has obvious scale advantages and strong market competitiveness
.

Kingfa Science and Technology stated that Baolai New Materials is the main body of investment and construction of 600,000 tons/year ABS and its supporting equipment projects
.
The project is located in Liaodong Bay New District, Panjin City, Liaoning Province, a key petrochemical industry base planned by the state.
It is equipped with a 300,000-ton crude oil terminal and a professional chemical terminal, which has good resources and location advantages
.

ABS has both the toughness and low temperature impact resistance of polybutadiene rubber, the heat resistance and chemical stability of acrylonitrile, and the rigidity and gloss of polystyrene resin, so it has impact resistance, heat resistance, low temperature resistance and chemical resistance.
It is widely used in automobiles, electronics, household appliances and other industries due to its excellent comprehensive properties, such as easy processing and molding, and good gloss
.
By holding 51% equity of Baolai New Materials, it is beneficial for the company to enter the upstream raw material industry such as ABS, consolidate the company's industry position in the field of chemical raw materials and modified plastics, improve the company's profitability, and obtain the technology innovation ability of the whole industry chain.
The opportunity is in line with the company's strategy of "strengthening the middle, expanding the two ends, leading with technology, and developing by leaps and bounds" and the interests of all shareholders
.