I. Project Background and Existing Conditions
Methyl methacrylate (MMA) is a very important organic chemical product ,which is mainly used to produce organic glass (PMMA), mold plastics ,superior car paint, PVC modifier (such as ACR and MBS, and etc .),second monomer of acrylic fiber ,premium ester oil additives, polymer concrete, artificial marble, textile slurry, adhesives, and etc. Per head consumption in China is less than 1% than that in the U.S. and Japan.
There are a 1,200,000T/Y catalytic cracking unit and a 400,000T/Y catalytic splitting unit in Anqing Petrochemical Works. Mixed C4, calibrated production of which is 45,000T/Y, produced by these units is not properly utilized presently. It is realty a great waste to burn this precious chemical raw material as low valued common LPG, which may be used to produce high valued chemicals. If it is used as the main raw material to produce MMA with the world top isobutene direct oxidizing process., it would be the most optimum utilization to mixed C4 source as well as change the backwardness in China with this action .

II. Project Content and Scale
To establish a new 50,000T/Y MMA plant with isobutene direct oxidizing process. Product purity>=99.90%.

III. Project Investment Estimation
Overall investment is 1,234,490,000 RMB Yuan ,among which foreign exchange is 34,000,000US Dollars. Project construction period is 2 years. Interest during the construction period is 94,040,000RMB Yuan. Circulating funds is 72,550,000RMB Yuan..

IV. Project Economic Benefit
Sales revenue :880,000,000 RMB Yuan
Tax:195,620,000 RMB Yuan
Profit after tax:166,960,000 RMB Yuan
Gain and lost balance point:61.17%
Internal return rate:23.00%
Dynamic investment recovery period:8.68 years (the 2 years' construction period is included)
Investment profit rate:14.10%

V. Cooperation Method
Sino-foreign joint-venture for 30 years.

VI. Present Progress of the Project
The project is reported to the Ministry of Chemical Industry, the Provincial Petrochemical Bureau, and the Municipal government with supports from the relevant leaders. It is required to quicken the pace of prestige work . Anqing Petrochemical Works has shown its interest in the project and expressed its necessary help and supports to it.

VII. Chinese Company Undertaking the Project
Shuguang Chemical Group of Anhui province
Project Manager: Yu Yongfa, President of Shuguang Chemical Group
Liaison Person: Cheng Changbin
Address:No.80,East Huazhong, Anqing
Tel:86-556-5372600-8307
Fax:86-556-5372600-8306
Post Code:246003
E-mail: tech@sgchem.com

Project Name: Anhui Shuguang Chemical Group’s Project of Annual Production of 100,000 Tons of Ion Membrane Sodium Hydroxide

Under the Jurisdiction of: Anqing city, Anhui Province

Project Background: As there is no big sodium hydroxide project in areas around Anqing city, and Chinese Petrochemical Co. Ltd. Anqing branch has a large-sized assembly for oil refining and producing chemical fiber, with help from departments concerned of Anqing government, to meet the needs of sodium hydroxide needed by Anqing project of annual production of 600,000t of wood pulp and paper, and to meet the needs of raw material of liquid-, and solid sodium cyanide needed by our group, seeking for common development of sodium chloride industry and petrochemical industry, and expanding and strengthening Anqing local chemical industry, our group has decided to build the project of annual production of 100,000 tons (in 100% purity) of ion membrane sodium hydroxide.

Construction Scale And Contents: Annual production of 100,000 tons (in 100% purity) of ion membrane sodium hydroxide, most of which is used as raw material for our group’s liquid-, and solid sodium cyanide, while small part is to be sold. At the same time, with by-product we’ll produce 2,400t 99.9% purity hydrogen, which is used for our assembly of synthetic ammonia. Also with by-product, we’ll produce 88,000t chloride gas, which is used for our production of 20,000t chloroproylene oxide, 60,000t polyvinyl chloride and 30,000t hydrochloric acid of 31% purity.

Estimated Market And Analysis: Among 100,000 tons (in 100% purity) of ion membrane sodium hydroxide, 69,000 tons are used as raw material for our group’s liquid-, and solid sodium cyanide, and 31,000t as raw material of Anqing project of annual production of 600,000t wood pulp and paper (in the first phase 7,956 tons are needed, and 31,000t for the second phase). After the completion of this project, the produced sodium hydroxide can be wholly used in Anqing.

Technical Feature:Adopting production process like ionic exchange membrane cell.

Estimated Investment:A total investment for the project is 860 million yuan RMB (about US$103.6 million), among which 400 million yuan (about US$48 million) is needed for the first phase, while 460 million yuan (about US$55.6 m) for the second phase.

How Far Has the Project Stepped to? At present we are undertaking preliminary work for the project, including mainly selection of the plant, environmental evaluation, feasibility study, choosing the best cooperation method, and so on.

Cooperation Method: Joint venture, cooperation or transfer of technology

Briefs of the Unit Carrying Out the Project: Anhui Shuguan Chemical Group takes its main product sodium cyanide as the dragon head. The group, combining science, industry and trade into an organic whole, is a newly rising enterprise group, and the largest in scale and most advanced in technology in production of cyanide in the same industry in China and even in Asia.

The group produces annually 50,000t high purity solid sodium cyanide and 140,000t liquid sodium cyanide, 5,000t high purity solid potassium cyanide, 3,000t plexiglass, 35,000t synthetic ammonia, 120,000t ammonium bicarbonate， 20,000 formaldehyde, 20,000t methyl alcohol, 1 million metal packing steel barrels (cases). The group has a certain-scaled company of road transportation of dangerous goods and a certain-scaled company of river transportation of dangerous goods.

Through carrying out strategy of taking main product as a brand, “Qingyi”-branded high purity sodium cyanide has kept international first class level both at home and abroad. It has passed confirmation according to ISO9001 quality management system, ISO14001 environmental management system and GB/T28001 occupational health safety system. It has been entitled as Anhui provincial “famous-branded product”, “credible product in quality” and “detection-free product”.It occupies 50% of our domestic market. By whole sale it’s exported to Southeastern, middle Asian, Oceanian, African regions. Our export value accounts for the first place in the same industry in China.

Under the guide of enterprise spirit of “High quality, high efficiency and creating the first class”, the group has achieved excellent economic achievements, being listed the top five profit and tax in Aniqng industrial enterprisesfor many years. The group has won many titles, such as “China’s enterprise keeping contracts and laying stress on credibility”, “National enterprise advanced in environmental protection” and Anhui provincial “enterprise with high-tech”, “enterprise advanced in management”, “civilized unit”, etc.

During the period of “the Eleventh Five Year Plan”, the group tries to extend its product chain and march forward towards direction of high-tech, high added value and fine chemical industry, so as to build a fine chemical product base in the whole province and even in whole China.

Analysis of Economic and Social efficiency:

1. Laying stress on social efficiency

a.To make contribution to building Anqing into a city of 100 billion yuan; to raise Anqing economic position in Anhui province.

b.To create more jobs, so as to promote social stability.

c.To properly use relative economic resources, natural resources and social resources, so as to achieve the best economic results and expand the economic forces of Anhui Shuguang Chemical Group

2. Appraisal of economic results

After the project is completed and put into production, It’s estimated that we will reach to an annual sale of 977 million yuan and profit and tax of 156.75 million yuan, among which the annual whole sale would reach 400 million yuan after the first phase construction, and annual profit and tax of 80 million yuan. The two phases’ construction will be completed in 2008 and 2010 respectively.

Legal Representative of the Unit Implementing The Project: Yu Yongfa

Contact Person:Chen Changbin

Postzip:246005

Add:47, Jingbei Road, Anqing

Company’s Name:Anhui Shuguang Chemical Group

Tel:86-556-5381406; 86-556-8381407

Fax:86-556-5375706

E-mail:aqsg@mail.hf.ah.cn,tech@sgchem.com