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Dow Epoxy and Shanghai Tian Yuan Huasheng Sign Long Term Raw Materials Supply Agreements for Two Proposed Plants in Shanghai


Dow Epoxy, a business unit of The Dow Chemical Company (“Dow”), has signed long term raw materials supply agreements with Shanghai Tian Yuan Huasheng Chemical Co., Ltd. (TYHSC) for its planned 100,000 MTPA liquid epoxy resin (LER) plant in 2010 and 150,000 MTPA glycerine-to-epichlorohydrin (GTE) plant in 2011 at Shanghai Chemical Industry Park (SCIP).

TYHSC will provide caustic soda and anhydrous HCL for the LER and GTE plants at SCIP and receive recycled brine from Dow for chlor-alkali production. The total contract value over 10 years is in excess of US$400 million. TYHSC, a wholly-owned subsidiary of Shanghai Chlor-Alkali Chemical Co., Ltd. (SCAC), is the newly-built production base of SCAC at SCIP.

The cooperation between TYHSC and Dow fully embodies the advantage of advanced production processes and supports the government’s efforts in building a “circular economy” whereby use of resources is being maximized and recycled as much as possible. The fact that TYHSC and Dow will be providing raw materials to each other supports that drive and also enables the two companies to benefit from site integration at SCIP as well.

Li Jun, General Manager of SCAC, said,“We are most grateful for the confidence and trust that Dow Epoxy has placed upon us. We’ll be working closely with the Dow Project team to carry out mutual support and common development, so as to ensure the stable, secure supply of raw materials to the new plant. We are fully convinced that TYHSC and Dow will become good and long-term partners.”

“A stable and trusted supplier is critical to the success of the LER and GTE plants and we’re pleased to have entered into a contractual relationship with such a strong partner as TYHSC,” said Noelle Walsh, global business director, Liquid Resins & Intermediates, Dow Epoxy. “We have made tremendous progress since we announced the site location at SCIP last year. The projects are moving full steam ahead and we expect to break ground in the first quarter of next year. The two new plants are well on track to come on stream in 2010 and 2011 respectively.”

Last month, Dow Epoxy announced that its LER and GTE projects had received approvals for their environmental impact assessments (EIAs) from the Chinese Ministry of Environmental Protection.

“With the long term agreement with TYHSC, I’m delighted to see that we’ve reached another significant milestone for the two new projects,” said Patrick Ho, Business Group President, Epoxy & Specialty Chemicals, The Dow Chemical Company. “The worldclass LER and GTE plants in Shanghai will further strengthen our ability to meet growing customer needs in China, particularly in the core markets of coatings, electrical laminates and civil engineering. These plants will put us in a unique competitive position characterized by innovation, stability and reliability.”

“With our proprietary GTE technology, we will cut chlorine consumption in half and produce 10 times less waste water, while also improving process efficiency and product quality,” added Walsh. “This technology is a prime example of Dow’s commitment to significantly reduce and conserve energy as part of its 2015 Sustainability Goals.”

Dow’s proprietary GTE technology is distinct from and an alternative to any GTE technology practiced today. Dow is actively pursuing patent protection on its developed GTE technology and will continue to file numerous patent applications to ensure a strong intellectual property position.

The cooperation between TYHSC and Dow also shows that SCAC will further implement the strategy of Shanghai Huayi (Group) Company which is firmly taking SCIP as its main base for future development. By consolidating its most competitive position in chlorine supply at SCIP, TYHSC will gain long-term and stable sales revenue and space for future development.


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