Production Suspension of the Ethylene Project
               in Zhongyuan Petrochemical Co., Ltd.
                         By Song Ping
According to the  decision  of  China  Petrochemical  Group
  Corporation,    the   ethylene   project   in   Zhongyuan
Petrochemical Co., Ltd.   started  a  3- month  production
suspension from Sept. 15.
The ethylene project in Zhongyuan Petrochemical Co.,   Ltd.
was a major project of the state during  the  Eighth  Five
-year Plan period. It  included  a  140  000  t/a  ethylene
cracking unit, a 120 000 t/a polyethylene unit  and  a  40
000 t/a polypropylene unit.  It  started  construction  in
1992 and was put on stream in July  1996.   However,   the
project has few product  varieties  and  poor  ability  of
market  competition.   It  fails  to  reach  the  economic
production scale and has built up heavy debts. The  amount
of debts reached 4.047 billion yuan at  the  end  of  June
this year and the assets-liabilities ratio is as  high  as
97% today. The company has suffered a great loss  for  two
consecutive years. The amount of loss in the  months  from
January to August this year was 442 million yuan and  will
be over 660 million yuan in the year.
China Petrochemical Group Corporation  therefore  made  the
decision on Aug. 20 that the ethylene project in Zhongyuan
Petrochemical Co., Ltd. should suspend production and  get
itself out of the difficult situation.
Half a month overhaul will be conducted  to  remove  hidden
troubles and equipment  defects,   optimize  raw  material
structure and create conditions for future  full- capacity
operation. It is  expected  that  the  production  can  be
restored in the year and the amount of loss  will  not  be
more than 550 million yuan.