China's Town Star Company to Invest $1.5 Billion to Build a 2-Million-Ton-Per-Year Dimethyl Ether Plant

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Researched by Industrial Info Resources (Sugar Land, Texas)--Town Star Company (Linfen City, Shanxi province) plans to invest just under $1.5 billion to build a 2 million-ton-per-year dimethyl ether base. Once built, Town Star will become China's second largest methyl alcohol and dimethyl ether manufacturer, second only to China National Coal Group (SHA:601898) (Beijing).

The plant will be located in Anze County, Shanxi province. While the complex will cover a 26-square-kilometer area, the core area of the facility will cover only a bit over two square kilometers. Once built, the plant will be able to turn out 2 million tons of dimethyl ether and 3 million tons of methyl alcohol per year.

Phase I construction will involve completing a 1 million-ton-per-year dimethyl ether facility. The company is now seeking partners to share the cost of construction of the facility.

Town Star has submitted relevant files to the National Environmental Protection Administration and is awaiting the result of its environmental assessment. The exact date of the start of construction has not been released.

Founded in 2001, Town Star has a total capital value of $158 million and over 1000 employees. It boasts China's first 4.3-meter stamp-charged coke oven, which has an annual capacity of 700,000 tons. The company's sales income in 2007 stood at $123 million.

Town Star makes good use of the leftover coke-boiler coal gas and has constructed a project which can produce 200,000 tons of methyl alcohol and 100,000 tons of dimethyl ether per year. The project will come online in September.

China National Coal Group, the largest manufacturer of methyl alcohol and dimethyl ether in China, has plans to build a project in Erdos in the Inner Mongolia region. This project is set to produce 4.2 million tons of methyl alcohol and 800,000 tons of dimethyl ether annually. The company already has a 1.8-million-ton-per-year methyl alcohol plant in place in Heilongjiang province, in northeast China.

By 2010, China's total production capacity for dimethyl ether is expected to top 15.8 million tons.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.