(Yicai) Dec. 7 -- Wankai New Materials, a Chinese supplier of bottle-use polyester chips, plans to build a USD45.1 million joint venture plant in Nigeria to meet the needs of the local market.

The new plant, located in Sagamu in the Nigerian state of Ogun, will have an annual production capacity of 300,000 tons of food-grade bottle-use PET chips, the Jiaxing, Zhejiang province-based firm announced late yesterday. The construction period of the plant will be two years.

Wankai will set up a JV in Singapore with XJP Trading, a trading firm incorporated in Hong Kong, which will be responsible for the construction and operation of the new plant, the company added, noting that it will own 65 percent of the JV.

The plant will process base PET chips imported from China as raw material, said Wankai.

Nigeria is Africa's most populous country, the continent's largest consumer of PET products, as well as one of the few African countries with the fundamentals of the plastic industry, Wankai pointed out.

Investing in and building plants in Nigeria can help Wankai avoid trading conflicts and establish a global industrial and sales service network in core overseas markets, the firm noted.

Wankai had an annual capacity of 2.3 million tons of bottle-use PET chips last year, ranking second in China and fourth worldwide. It racked in operating revenue from the bottle-use PET chip business of CNY15.6 billion (USD2.2 billion) last year, accounting for 81 percent of the total, according to the firm’s latest annual report.

Coca-Cola and Chinese brands Nongfu Spring, Cestbon, and Wahaha Grop are among Wankai's most well-known clients.

XJP Trading has over 10 years of experience in running plastic raw material trade in Nigeria, having established a sales network in the country and the whole western African market, selling as many as 60,000 tons of PET chips there last year, Wankai said.

Wankai's shares [SHE: 301216] closed 0.4 percent down at CNY13.71 (USD1.93) in Shenzhen today.

Editor: Futura Costaglione