Chemicals firm bullish on polyol investment

Corn-based products maker Global Bio-Chem Technology will invest 800 million yuan this year to produce polyol, which can replace petroleum in the manufacture of materials such as anti-freeze, plastic and chemical fibre.

With its new polyol production plant in Changchun expected to start operation in December, co-chairman Liu Xiaoming said 80 per cent of its investment capital would be spent on polyol manufacturing this year.

He said less than 100,000 tonnes of polyol would be produced this year, although the plant had an annual capacity of 200,000 tonnes.

Polyol was priced at 8,000 to 10,000 yuan per tonne and the gross profit margin could reach 30 per cent when the factory was in full production, Mr Liu said.

'We are confident about the polyol project because the market is huge, and we would focus on the making of plastic in the first year.'

He said the increasing demand for corn had pushed prices up 13 per cent to more than 1,100 yuan per tonne since November last year amid the strong demand for petroleum substitutes due to high fuel prices. But the company had passed most of the cost increase on to clients.