(Yicai Global) June 19 -- Shares in Satellite Chemical advanced today after the Chinese polymer materials producer said it is investing CNY25.7 billion (USD3.6 billion) to construct an industrial park for alpha olefins, a high-end new material used in synthetic lubricants, motor oils and other products.

Satellite Chemical’s share price [SHE:002648] closed flat at CNY14.79 (USD2.07). Earlier in the day it climbed 3.7 percent to CNY15.35.

The industrial park, which will be located in Lianyungang, eastern Jiangsu province, will make the equipment to produce the light hydrocarbon raw materials used in alpha olefins as well as other devices, the Jiaxing, southeastern Zhejiang province-based company said.

Once fully completed, it should have an annual capacity of 2.5 million tons of light hydrocarbon raw materials a year and an annual output value of CNY48 billion (USD6.7 billion), said the leading manufacturer of acrylic acid which is also one of China’s few producers with a complete industrial chain in acrylates, polymer emulsions and functional polymer materials.

The investment is consistent with the company’s strategies and development plans, it said. Satellite Chemical will inject funds into the project in phases and also raise financing, so it will not have an adverse impact on the firm’s financial status and operating results.

Satellite Chemical’s new ethylene acrylic acid factory that it is building with South Korea’s SK Geo Centric broke ground on June 17 in Lianyungang’s Xu Wei new district, it said today.

The first phase, costing CNY1.6 billion (USD229.1 million), will have an annual output of 40,000 tons of ethylene acrylic acid for use in packaging. Covering 7.2 hectares, the plant is expected to start operations in 2025. The second and final phase will focus on emerging products such as recycled and green chemicals.

Editor: Kim Taylor