R&P and Shanghai Hop Zenith Chemical Trading have inked a memorandum of understanding (MoU) for floating a joint venture to set up a unit in China for production and distribution of Thermoplastic PolyOlefin (TPO) compounds for the automotive sector across the Asia-Pacific.
With a view to capitalizing on larger customer base in that country, the manufacturing unit under the joint venture is likely to begin with an installed capacity of 15kta.
The duo plans to raise the output to 50kta within after five years.
R&P chairman Y K Tan said: "With 70% of our current deliveries to global automotive OEMs in China, we look forward to having a production facility in China to strengthen the supply chain with our customers there. China remains an attractive and important automotive market on a global scale."
R&P is the designated toll compounder for ExxonMobil Chemical's Exxtral grades from September 2008 to October 2014, while Hop Zenith was inducted by R&P in December last year as its main distributor to conduct marketing of its Sterlene grades in China.
Hop Zenith is a distributor for EMC's Exxtral grades from Oct 2011 to Oct 2014.
R&P took the license of the technology from ExxonMobil Chemical last year when ExxonMobil Chemical parted its way from the TPO market.
Hop Zenith director Wayne Zhang said: "We expect to be able to serve more OEM customers in the Asia Pacific region more effectively through this joint venture partnership."
