Shanghai Petrochemical says its share of China's acrylic market will be boosted to 45 per cent from 35 per cent with the purchase of a controlling interest in Zhejiang Acrylic Fibre Plant. Company spokesman Lian Xiaolu said the H-share firm planned to acquire more than 50 per cent of the Zhejiang plant but said final details were still being ironed out. The company has already signed a letter of intent for the acquisition. Mr Lian said Shanghai Petrochemical would have an annual acrylic output of 122,000 tonnes after taking into account the Zhejiang plant's production capacity of 30,000 tonnes. He said China met half of its demand for acrylic output with the remainder imported. The market had been plagued by an influx of illegal imports, giving rise to inventory and falling product prices, he said. Mr Lian expected the price of acrylic to recover gradually in the second half after Beijing tightened its grip on smuggled imports in the first half of the year. The establishment of Zhejiang Acrylic cost 800 million yuan (about HK$742.4 million) and Mr Lian estimated half of this investment was borrowed from local banks. He said Shanghai Petrochemical, which could assume some of Zhejiang's debts, would not have to issue new shares to fund the acquisition. Zhejiang is Shanghai Petrochemical's second acquisition of an acrylic. It earlier bought Shanghai-based Jin-Yang Acrylic Fibre Plant for 38.8 million yuan in August and assumed the plant's long-term debts of 710 million yuan. Mr Lian rejected suggestions Shanghai Petrochemical was forced to acquire poorly-performing small enterprises under the state enterprise reform programme. The government did not force Shanghai Petrochemical to take over the plant, he said. 'The government is encouraging large enterprises to acquire small ones and it will provide us with some preferential measures,' he said.