Zhenhai Refining to invest 1.7 bln yuan in PX development project

HONG KONG (AFX-ASIA) - Sinopec Zhenhai Refining & Chemical Co Ltd chairman Sun Weijun said the company is investing 1.7 bln yuan to develop a paraxylene capacity of 450,000 tonnes per year over the next three years.	    "The plan to raise the PX capacity is aimed at an increased domestic demand, in particular from local PTA (purified terephthalic acid) makers," Sun said.	    "Furthermore, return on capital employed of PX exceeds 8 pct, a level which is good in the refining industry," Sun said.	    Sun said the average ROCE of the company is about 6 pct.	    "Zhenhai Refining is expected to become the only commercial supplier of PX in China," Sun said.	    Sun said the company's capital expenditure this year will reach 1.4 bln yuan.	    Sun said the company has no plan to expand its gas station network, although its existing 70 gas stations are profitable after restructuring.	    "Parent company Sinopec Corp will be in charge of expanding the gas station network, instead of Zhenhai Refining," Sun said.	    Yesterday, Sinopec said it will acquire an additional 4,000 gas stations by the end of July.	    Meanwhile, Sun said he expects Zhenhai Refining will cut its workforce by 350-400 employees this year after last year's reduction of about 1000.	    "Zhenhai Refining is planning to cut costs by 60-70 mln yuan this year through labour reduction and other cost savings measures," Sun said. 

Related stock : (NIL)