Industry News

Victrex Forms JV to Build New PEEK Polymer Manufacturing Facility with Yingkou Xingfu

Published on 2020-01-14. Author : SpecialChem

evonik-resomer-medical Victrex plc has announced the creation of a joint-venture between its subsidiary, Victrex Hong Kong, and Yingkou Xingfu Chemical Company, to build and operate a new PEEK polymer manufacturing facility in Liaoning, China, subject to certain performance conditions, including finalizing land purchase and permit applications. Victrex, which will be the majority partner and lead the joint-venture, will benefit by further differentiating and complementing its portfolio of PEEK and PAEK grades, in anticipation of a range of significant long-term growth opportunities across several end markets in China, as well as aligning with China’s ‘Made in China 2025’ initiative, where specifying domestically produced PEEK in certain applications is expected to gain momentum.

New Facility to Serve Regional Customers

Victrex already has an established relationship with its joint venture partner through its monomer supply chain, with Yingkou Xingfu having significant experience of developing and operating chemical facilities in China which meet international quality, process and environmental standards.

This announcement builds on Victrex’s recent appointment of a General Manager for China and an increased commercial presence, as well as its strong technical service offering to customers, which includes its existing Technical Centre in Shanghai. The investment sets the stage for Victrex to serve some of its regional customers from a local facility and in a more diverse way. Victrex will also oversee the management of process know-how and intellectual property during development of the polymerization process.

Details of the Transaction

Victrex’s share of the overall investment, the majority of which comprises capital investment during construction, is expected to total £32m funded in cash, with approximately £28m of capital expenditure and £4m of start-up costs, with commissioning of the facility anticipated in early 2022. The new plant will eventually be capable of producing up to 1,500 tons per annum. Establishing a new PEEK polymer plant in China is in line with Victrex’s record of investing in capacity ahead of demand, with an expectation that future capacity increases will be more gradual, rather than larger multi-year investments.

Investment to Further Differentiate and Increase Business

Jakob Sigurdsson, Chief Executive of Victrex, said, “This investment is in line with our record of not only investing ahead of demand, but in complementing and further differentiating our range of PEEK and PAEK grades, as well as setting the stage for specific geographic growth, whereby we can capitalize on the significant opportunities in China and the Asia Pacific region by having a competitive manufacturing presence there."

“Alongside the Made in China 2025 initiative, some of our increasingly diverse application areas mean our customers require a quality and differentiated PEEK offering. Whilst we already manufacture a range of PEEK and PAEK grades, this will enhance our portfolio, making us even better positioned in a region where we have seen strong growth in recent years and continue to see attractive opportunities, aligned to our know-how and strong technical and application development capabilities."

“Overall, we believe this is a good entry point to a China manufacturing operation, working with an established partner and offering an attractive returns profile.”

Victrex Becomes the Majority Partner with 75 percent Share

The joint venture will establish Victrex Hong Kong Limited as the majority partner with a 75 percent share, with leadership being assumed by Victrex once the facility is operational. The investment follows on from Victrex commencing a debottlenecking project at its main Hillhouse UK facilities in FY 2020, which will add up to 1,000 tons per annum of nameplate capacity when completed.

Source: Victrex
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