Qixiang Tengda to raise USD316 million to produce PBS Summary: Qixiang Tengda plans to raise USD316 million to construct

PBS program with capacity of 150,000t/a. Tags: biomaterial, PLA, Starch Based MaterialPBSLignin, Cassava, Lyocell fiber, Casa On Sep. 25, 2012, Zibo Qixiang Tengda Chemical Co., Ltd. (Qixiang Tengda) publishes a notice that it plans to raise USD316 million (RMB2 billion) by non-public offering shares to step into China's biodegradable industry. The company tries to invest USD618 million (RMB3.91 billion) to construct PBS (poly butylenes succinate) program with capacity of 150,000t/a, according to CCM Internationals October issue of Biomaterials China News. The company tries to offer no more than 120 million shares with price of no less than USD2.212 (RMB14) per share. At present, the company's holding companyZibo Qixiang Petrochemical Industry Group Co., Ltd. (Qixiang Group) will input no less than USD15.8 million (RMB100 million). The company will satisfy the balance between the total investment and raised fund by selffinancing. Qixiang Tengda will divide the program into two phases, and construct a whole work flow of PBS including the raw material succinic acid (SA) and butanediol (BDO). It will spend one year on the first phase. At first, Qixiang Tengda will make use of its abundant byproductbutane to produce maleic anhydride (MA) with capacity of 100,000t/a. MA can be used to produce SA and BDO. During the first phase, the production facilities of MA and BDO with capacity of 100,000t/a and 55,000t/a respectively should be completed. It will spend one and a half years on the second phase to construct production facilities of MA, BDO and SA with capacity of 100,000t/a, 55,000t/a and 75,000t/a respectively. At last, it will construct the PBS facilities with capacity of 150,000t/a. Qixiang Tengda is entirely optimistic about the prospects of PBS though its current market is not so good. It thinks that domestic potential demand for PBS can exceed 500,000 tonnes per year. Qixiang Tengda thinks that PBS is the most excellent biodegradable materials in mechanical performance such as tensile strength, elongation at break, and toughness, and it also has an outstanding processing property. The biodegradable plastic industry has also been encouraged by

the government. In H2 2007, PBS, PLA and PCL were listed in the 11th Five-Year Plan as products to be encouraged, and in the 12th Five-Year Plan, their position hasn't changed. In fact, the current market of PBS is not so good, and its capacity of 150,000t/a may not be digested. Zhejiang Hangzhou Xinfu Pharmaceutical Co., Ltd. (Xinfu Pharmaceutical) is also a listed company that produces PBS for more than 6 years with capacity of 13,000t/a. However, according to the 2012 semiannual report of Xinfu Pharmaceutical, the sale volume of this companys PBS is less than 1,000 tonnes (Please refer to Biomaterial China News 1209, Xinfu Pharmaceutical remains cautious with PBS business). Besides, Xinfu Pharmaceutical has operated overseas market for a long period, and its understanding of the PBS market may be better than Qixiang Tengda. Mr. Liu, Secretary of the Board of Qixiang Tengda, said that compared to Xinfu Pharmaceutical, they don't have any special measures to expand market, so it may be a difficult task to make a breakthrough in sales volume. Even though, Mr. Liu still insists that the future of PBS is good, as Qixiang Tengda owns the whole processing chain, and the cost may be smaller than that of other producers. On the other hand, more countries start to care about the environment, which will promote the growth of the industry. It's no doubt that PBS is a promising industry, but all commercial production should be led by consume market. As the growth of the new market is slow, it is estimated that Qixiang Tengda will have a tough road to expand its market after it finishes the construction. Source: Biomaterials China News 1210 http://www.cnchemicals.com/Newsletter/NewsletterDetail_245.html Main content of Biomaterials China News 1210: Domestic lyocell fiber starts to sprout Main barriers for China's PLA industry: unstable quality and market imbalance New environmental protection measures help biodegradable materials grow faster Qixiang Tengda to raise USD316 million to produce PBS Longlive Bio-technology: enzymatic hydrolysis lignin program to replace a corn deep processing one Tianrui Technology received capital support from Anhui Provincial Government Chemical enterprises to beach biological succinic acid market Thailand government plans to release its national dry cassava stocks to China Biological alcohol business of Global Bio-Chem Technology may be better in H2 2012 Domestic demands led to increasing import and decreasing export of China's PLA

Import analysis of cassava upon new extracting season in Aug. 2012 Import volume of China's castor oil and its derivatives decreases significantly in Aug. 2012 Wuhan Boiler manufactures boiler for bio chemical alcohols waste burning Green Process and Collaborative Innovation of Chemical Resources Center establishes Output of agricultural film increases by 3.72 percentage point in Q1 2012 Potato production may reduce in 2012 due to potato late blight Corn production may suffer decrease due to typhoon

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