Sinopec Yizheng Chemical Fibre (01033.HK) announced that its board of directors has passed a resolution to approve a JV agreement to be entered into by the company with Far Eastern Polytex Holding Limited (Far Eastern Holding). The JV company, Far Eastern Yihua Petrochemical (Yangzhou) Corporation, will be principally engaged in the production and sale of PTA (purified terephthalic acid). The JV agreement is expected to be signed in early December 2011.

The JV company's US$250 million (HK$1.95 billion) registered capital will be contributed as to 40% by Sinopec Yizheng Chemical Fibre and 60% by Far Eastern Holding.

In order to boost the competitiveness and economic efficiency of the PTA project, the two parties agreed that the construction scale of the project will be increased from the original 1 million tonnes per year to 2 million tonnes per year, and the latest processing technology and equipments in the world will be used. Besides, the PTA project will be located at Yangzhou Chemical Industry Park, and be expected to commence construction in 2012. Its construction period will last for 27 to 30 months.