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Eu Approves the Establishment of a Joint Venture Between Innex and Sinopec

On February 20th, the European Commission announced that it had approved the formation of a joint venture between Swiss company INEOS Group and China Petroleum & Chemical Corporation (Sinopec) under the EU Merger Regulation.

The joint venture, INEOS Sinopec Tianjin Petrochemicals Co. Ltd., will supply ethylene and its derivatives in China. INEOS is a private enterprise group that produces a wide range of chemicals, including petrochemicals, specialty chemicals, and oil products. Sinopec, on the other hand, is a state-owned oil and petrochemical enterprise group. The European Commission determined that since the joint venture's activities in the European Economic Area were limited and the acquisition would not lead to a monopoly, the transaction was subject to a simplified merger review procedure.

It is worth noting that INEOS has made several investment projects in China recently.

Contracting the high-performance composite materials production and research center project

On January 9th, the INEOS High-Performance Composite Materials Production and Research Center Project in Changzhou High-Tech Zone was signed.

INEOS Group's Composite Materials Division has invested in two companies in Changzhou: Changzhou INEOS Composite Materials Co. Ltd. and Changzhou INEOS Special Materials Co. Ltd. Changzhou INEOS Special Materials is located in the Binjiang Development Zone and covers an area of about 100 acres. Its main products are rubber resin and adhesive, which are widely used in wind power, yachts, sanitation, transportation, and other industries.

With this investment in Changzhou, INEOS Group is committed to developing the Changzhou factory into INEOS Composite Materials' China headquarters, integrating research and development, production, and sales. The new project covers an area of 47 acres and is expected to start construction in the second quarter of 2023, with sales expected to exceed RMB 600 million after production. The main products include 18,000 tons of ethylene-based and high-performance unsaturated resins.

In addition, INEOS Composite Materials plans to relocate its research and sales centers from Shanghai to Changzhou's high-tech zone. The research center is INEOS Composite Materials' third-largest research center after Dublin and Finland, focusing mainly on the research and application of high-performance special resins, carbon fiber resins, and high-strength automotive resins.

Working with Sinopec to develop China's high-end chemical industry

On December 7th of last year, INEOS signed a cooperation agreement with Sinopec, under which INEOS would acquire a 50% stake in Sinopec Tianjin Ninggang Ethylene Project. The project has a 1.2 million tons/year ethylene cracker under construction and downstream high-end new material derivative product facilities, which are expected to start production by the end of 2023.

This cooperation agreement is the fourth one signed between INEOS and Sinopec since 2022. The three previous joint venture projects announced by INEOS and Sinopec include:

Contracting with Shanghai SECCO

INEOS agreed to acquire a 50% stake in Shanghai SECCO Petrochemical Co. Ltd., a subsidiary of China Petroleum & Chemical Corporation (Sinopec). Shanghai SECCO is located in the Shanghai Chemical Industry Park and covers an area of 200 hectares. Its current petrochemical production capacity is 4.2 million tons per year, including ethylene, propylene, polyethylene, polypropylene, styrene, polystyrene, acrylonitrile, butadiene, benzene, and toluene.

Contract with Sinopec Ningbo ABS Project

INEOS agreed to jointly establish a new joint venture company with Sinopec, with a 50%:50% equity ratio, to achieve a production capacity of 1.2 million tons/year of ABS, to meet China's rapidly growing demand. The 600,000 tons/year ABS project is located in Ningbo and is currently under construction by INEOS Benz. It is scheduled to start production at the end of 2023 and will be part of the joint venture company. INEOS and Sinopec also plan to cooperate on the construction of two additional ABS projects with a capacity of 300,000 tons/year each, using INEOS's globally leading Terluran®ABS technology. One of the 300,000-ton/year ABS projects will be located in Tianjin, and the location of the third project has yet to be determined.

Contract with Sinopec Tianjin Ninggang 500,000-ton HDPE Project

INEOS and Sinopec will build a new 500,000-ton/year HDPE project at the Tianjin Ninggang Ethylene Project. This HDPE plant is expected to start production at the end of 2023 and will be the first HDPE plant in China authorized by INEOS to produce INEOS pipe-quality products. In addition, INEOS and Sinopec plan to build at least two more 500,000-ton/year HDPE projects in the future, authorized to produce INEOS pipe-quality products.

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