Wankai New Materials to invest US$45.1 million to set up a polyester chips manufacturing unit in Nigeria

Zhejiang province-based Wankai New Materials, one of the largest polyester chips makers, has announced its plan to invest Chinese Yuan 323 million (US$45.1 million) in Nigeria to manufacture food-grade bottle-use polyethylene terephthalate (PET) chips for local Nigerian consumers. The plant is proposed to be set up in the form of a joint venture at Sagamu, Ogun in Nigeria, with a production capacity of 300,000 tonnes per annum of bottle-use polyester chips.

The Chinese polyester chips maker has proposed to establish a joint venture in Singapore with XJP Trading, a trading firm incorporated in Hong Kong, responsible for the construction and operation of the new plant. The Singapore-based trading firm will own a 65 percent stake in the Nigerian joint venture company. XJP Trading, with a decade-long experience in the trading of polypropylene (PP), polyethylene (PE), polyvinyl chloride (PVC), and PET in Nigeria and West Africa, has committed an investment worth US$29.25 million in this project.

The construction of the Nigerian manufacturing plant is expected to take two years. with commercial production commencing thereafter. The joint venture plant in Nigeria is set up based on processing base PET chips imported solely from China as a raw material.

Pointing out reasons for selecting Nigeria as its preferred manufacturing location, the company stated, “Nigeria is Africa’s most populous country and the continent’s largest consumer of PET Products, as well as one of the few African countries with the fundamentals of the plastic industry. Additionally, Nigeria is Africa’s largest economy, and therefore, the biggest in terms of gross domestic product (GDP). These factors boasted a stable political and business environment.”

By choosing XJP Trading from Singapore, Wankai has preferred to avoid a possible conflict of trading interest and unwanted competition in Nigeria which possesses a huge potential for polyester chips. Also, the tie-up with XJP Company will allow Wankai to do business without establishing a full-fledged global industrial and sales service network in the core overseas market.

The construction of this site and its further development is expected to alleviate the pressure on the Chinese PET chips production capacity launch cycle. According to reports, China maintained its leadership position in bottle-grade PET markets, with an estimated production capacity of 12.31 million tonnes in the calendar year 2022. China accounts for approximately 35 percent of the world’s total bottle-grade PET chip-making capacity. The top four bottle-grade PET chip makers include Yisheng Petrochemical, Wankai New Materials, Sanfangxiang, and China Resources Materials. These producers account for 80 percent of China’s total manufacturing capacity.

Wankai’s polyester chips
With an annual global production capacity of 3 million tonnes per annum, Wankai New Materials is the second largest bottle-use PET chip producer in China and the fourth biggest worldwide. The Chinese company currently sells its polyester chips to Russia, Egypt, Nigeria, and other countries and regions. The company reported a total revenue from the bottle-use PET chips business of Chinese Yuan 15.6 billion (US$2.2 billion) in the calendar year 2022, accounting for 81 percent of the firm’s total revenue. Major clients of Wankai include global cold-drink maker Coca-Cola, and the leading Chinese brands such as Nongfu Spring, Cestbon, and Wahaha Group.

Founded in 2008, Wankai New Materials Co Ltd specializes in the research, development, production, and sale of new materials. The company has two manufacturing facilities based in Haining City, Zhejiang Province, and Fuling District, Chongqing. The company’s Zhejiang Haining plant is adjacent to Shanghai, close to Hangzhou. Its Chongqing Fuling plant is one of the junction points of the ‘Belt and Road’ and the Yangtze River Delta Economic Zone.

XJP Trading
Singapore’s XJP Trading has over 10 years of experience in running plastic raw material trade in Nigeria. The company has an established sales network not only in Nigeria but also in the whole western African market. XJP reported 60,000 tonnes of PET chip sales in these markets in 2022.

DILIP KUMAR JHA
Editor
dilip.jha@polymerupdate.com