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Chi Mei to add ABS and acrylic capacity in China

PLASTICS NEWS REPORT

ZHENJIANG CITY, CHINA (August 15, 2005) — Taiwan’s Chi Mei Corp. plans to invest US$100 million (RMB 811 million) to expand its ABS production facilities and to start a new acrylic resin plant in mainland China.

The world’s largest ABS producer will add 100,000 metric tons to its existing ABS production capacity of its mainland plants, reaching 350,000 metric tons. The construction will begin by the end of the year and production is scheduled to start within 18 months.

The new facilities will combine styrene acrylonitrile and ABS capabilities in one site.

Chi Mei said it hopes the Chinese government lifts a ban on shipping AN by river. Chi Mei said the company will otherwise have to spend more on transportation of raw materials, as its mainland plants are located in Zhenjiang, where the most cost-efficient transportation means is through the Changjiang river.

The Chinese market for ABS is growing by 8 percent annually. The country imports about 2 million metric tons of ABS every year.

Last November Chi Mei only used 55 percent of its ABS production capacities of both the Taiwan and Zhenjiang facilities.

On the same site in Zhenjiang City of Jiangsu province, Chi Mei also will start the construction of its first acrylic production facility in Mainland China by the end of next year. The facility will have an annual capacity of 50,000 tons.

The company’s acrylic plant in Tainan, southern Taiwan has an annual capacity of 90,000 tons. It is also on expansion to meet growing demand.

Company officials said the company will produce acrylic of higher standards, in order to meet the requirements of applications in outdoor ad signs, decorations, and sunglasses used for the 2008 Olympics.

Chi Mei’s Zhenjiang site, covering 1,500 mu (1 million square meters) of land, currently has annual production capacities of 300,000 tons of PS, 250,000 tons of ABS and 200,000 tons of AS. The company primarily serves domestic auto and household appliances manufacturers.

Chi Mei Group was founded in Tainan by Hsu Wenlong in 1953. It was the first producer of PMMA sheet in Taiwan.

Privately owned Chi Mei Group is the largest shareholder in publicly listed Chi Mei Optoelectronics, the world’s No.4 and Taiwan’s No.2 TFT-LCD maker.

Mitsubishi Chemical Corp. also has invested in Chi Mei’s Zhenjiang facilities.
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