We are pleased to announce that Cosmo Oil Co., Ltd. (hereinafter "COSMO"; headquarter: Minato-ku, Tokyo, Japan; President & Representative Director: Yaichi Kimura; Share capital: JPY 107.2bn) and Hyundai Oilbank Co., Ltd. (hereinafter "HDO" headquarter: 640-6 Daejuk-ri, Daesan-eup, Seosan-si, Chungcheongnam-do, Korea; President and CEO: Young Tae Seo) have entered into a Memorandum of Agreement (hereinafter "MOA") for the establishment of a joint venture company (hereinafter "JVC") to undertake the paraxylene business in Korea in relation to a previously entered into Memorandum of Understanding (hereinafter "MOU"), "Strategic Cooperation of Oil Business". Outlined below are the main contents of this MOA.
1. Main contents of MOA for the establishment of JVC to jointly undertake the paraxylene business
- 1. Date of MOA:
- June 9, 2009
- 2. Signers:
- COSMO President & Representative, Yaichi Kimura
- HDO President & CEO, Young-Tae Seo
| 1) Planned establishment timing | September, 2009 (to be agreed in due course) |
|---|---|
| 2) Location | Korea (details are to be agreed in due course) |
| 3) Initial paid-in capital | To be determined |
| 4) Investment ratio | COSMO 50%, HDO 50% |
| 5) Primary business | Production and sale of paraxylene and other related products |
| 6) Size of plants |
a) Existing paraxylene plant using naphtha as feedstock, b) New paraxylene plant using mixed-xylene as feedstock |
2. Purpose
In the "Third Consolidated Medium-Term Management Plan", COSMO positioned the petrochemical business as a growth strategy and have been seeking ways to enhance its business portfolio.
Since signing the MOU in April 2008 on comprehensive oil business cooperation with HDO, a company in which International Petroleum Investment Company (an investment company wholly owned by the government of Abu Dhabi and also COSMO's strategic partner and major shareholder) indirectly has 70% interest, we have been discussing the possibilities for business cooperation, with view to make entry into the paraxylene business.
As COSMO and HDO both expect synergies in expanding the paraxylene business within HDO's refinery complex from effective utilization of COSMO group's mixed-xylene, we agreed to sign this MOA to continue our discussions to establish the JVC to undertake the paraxylene business.
In addition, COSMO also made a decision today that COSMO will build a new mixed-xylene distillation unit within Yokkaichi refinery to create greater synergies between HDO in the paraxylene business. This mixed-xylene distillation unit will also enable COSMO to tackle the decreasing demand in the domestic gasoline market.
*Overview of the new mixed-xylene distillation unit
- 1. Location
- Yokkaichi Refinery
- 2. Size of the plant
- New mixed-xylene distillation unit-300kton/year
- 3. Planned completion timing
- November, 2011
COSMO aims to increase and stabilize its profitability by establishing a consistent operational system from crude oil to paraxylene and balance the demand and supply of gasoline distillates through provision of stable supply of mixed-xylene produced by COSMO group to the JVC.
For further information, please contact:
Cosmo Oil Co., Ltd., Public Relations Office, Corporate Communication Dept.
Tel +81(0)3-3798-3101
