China's Zhejiang Hengyi has bought its third polyester unit this year as it continues to expand its downstream polyester capacity.
Hengyi, one of China's largest PET producers, bought Taicang Minghui Chemical Fibre in an auction earlier this month for 711mn yuan ($105mn).
Taicang Minghui Chemical Fibre owns a 200,000 t/yr polyester unit in Jiangsu province. It declared bankruptcy in November 2015, only about three years after starting operations, because of intense industry competition, poor production margins and high debt. Hengyi plans to rename the company Taicang Yifeng Chemical Fibre and restart production at the unit in October.
This is the third polyester company Hengyi has bought through auctions this year. It bought two polyester plants in Zhejiang province in March — Jiaxing Longteng Chemical Fibre, which was acquired for Yn722mn, and Hangzhou Hongjian for Yn600mn. The two plants with total capacity of 500,000 t/yr were both restarted in May, encouraged by strong PET fibre production margin.
Hengyi owned about 1.6m t/yr of PET capacity in Hangzhou, Zhejiang province as of the end of 2016. The company has embarked on an expansion drive this year as it looks for ways to digest excess purified terephthalic acid (PTA) availability from Yisheng Petrochemical, its 50:50 joint venture with private-sector Rongsheng Petrochemical.
In addition to the acquisitions, Hengyi's capacity will be boosted by the start-up of its new 600,000 t/yr polyester lines later this year. The firm also plans to invest Yn10bn to build 2mn t/yr of polyester capacity in Zhejiang province's Haining in the coming years.
