(Yicai) Aug. 22 -- Rongsheng Petrochemical has started production trials at its polyolefin elastomer raw material plant in China, in a move that will lessen the country’s reliance on imports.

The α-olefin pilot production facility at Rongsheng’s base in Zhoushan in Zhejiang province has produced high value chemical 1-octene of excellent quality, the Hangzhou-based petrochemicals giant said yesterday.

The facility, which uses ethylene as the raw ingredient, has an annual production capacity of 300 tons of 1-octene or 1,000 tons of 1-hexene with alternative process conditions. 

Foreign chemical businesses used to be the main POE producers, as the technology to make both the polymer and the monomers were once highly monopolized.

Rongcheng’s successful test output of the two monomers shows the company is cutting China’s dependence on foreign production technologies, and is able to produce much more value-added products, it added.

Both 1-octene and 1-hexene are important monomers used to produce POE, a high-performance, higher value polymer product that can act like plastics and rubbers simultaneously. Its unique physical property makes it an excellent engineering material with various applications.

Several other Chinese firms have also unveiled plans to build POE plants in recent years. In January, Rongsheng and its second-largest shareholder Saudi Arabian Oil Company, better known as Saudi Aramco, announced that they would partner on a new CNY67.5 billion (USD9.5 billion) facility in Zhoushan.

Among the various products the joint venture is scheduled to turn out is POE, with a planned annual production capacity of 200,000 tons. The plant is set to be operational in three years.

Rongsheng also announced late yesterday that its controlling shareholder plans to repurchase between CNY500 million and CNY1 billion (USD70.1 million and CNY140.2 million) of shares in the next six months, with the first tranche of CNY239 million completed yesterday.

Rongsheng’s shares [SHE: 002493] ended 1.8 percent higher at CNY8.60 (USD1.20) apiece today. The broader Shenzhen market fell 0.8 percent.

Editor: Futura Costaglione