(Yicai) April 30 -- China's Changhong Polymer Scientific and Technical plans to invest CNY11.5 billion (USD1.6 billion) building a new plant for acrylic acid, used to make adhesives and coatings, and employ a "disruptive" technology that should cut costs.

The factory, which will use a new production technology developed by a team led by an academician of the Chinese Academy of Sciences, will be built in Maoming, Guangdong province, Ningbo-based Changhong Polymer said yesterday.

The project’s first phase will have investment of CNY500 million (USD69.1 million) and entail the construction of a pilot plant with annual output capacity of 50,000 tons each of acrylic acid and acrylates. It is expected to come online in March 2026.

Changhong Polymer will start the second phase only after a successful running of the pilot plant, technically and financially, it said. The second phase will aim to scale up the capacity of the two major chemicals and build facilities to turn out more high-value-added downstream chemicals.

Unlike conventional acrylic acid production technology, which uses costly propylene as raw material and has a relatively complex production process, the new technology Changhong Polymer plans to adopt uses cheaper propane as the raw material with a simpler production procedure, the firm said, adding that the first phase can achieve an internal return rate of 29.4 percent.

Changhong Polymer will set up a joint venture with Haoxiang New Material Technology to build and operate the project, with Changhong Polymer contributing cash for a 90 percent stake. Haoxiang will bring its patent technology to the JV for the remaining 10 percent.

This will be the first time anyone has used Haoxiang's new patented technology on a mass-production scale, the firm added.

The statement did not provide more about the partner's background. But publicly available information shows that its actual controller, Chai Zhifang, is an academician whose expertise includes radiochemistry and other related fields.

Changhong Polymer’s shares [SHA: 605008] closed 0.1 percent lower at CNY15.40 (USD2.10) each in Shanghai today, after surging by more than 7 percent yesterday.

Editor: Emmi Laine