Phoenitron plans to develop energy market in China

Phoenitron Holdings Ltd, engaged in the metals recycling business in China has entered into a Letter of Intent with Shanghai Dong Fu Petroleum Chemical Sales Company Ltd (Shanghai Dongfu) to establish a joint venture in Shanghai. Engaged in setting up natural gas stations in the Yangtsz River Delta and other petrochemical related business, the joint venture is intended to tap emerging opportunities in the energy market. According to the letter of intent, Phoenitron Holdings and Shanghai Dongfu are to respectively hold 75% and 25% of the joint venture’s entire equity interests. The registered capital is expected to be about RMB200, 000,000, paid by the Group and Shanghai Dongfu in proportion to their respective shareholding in stages.

The letter of intent said that Shanghai Dongfu shall guarantee the obtaining of all necessary permits and licences for the joint venture. Shanghai Dongfu shall also be responsible for ensuring all necessary licences and equipment be properly possessed by the joint venture and up to the standard of operations for the purpose of the project, as well as providing technical advice and training to the operators when necessary.

Lily Wu, Chairman of Phoenitron, said, “The group has been actively exploring opportunities in order to diversify its existing business and enter new markets with significant growth potential. In view of the increasing environmental awareness and a strong domestic demand for natural gas, the joint venture is in line with our business direction and marks our first foray into the energy market. After the formation of the joint venture, we plan to open 10 natural gas refuelling stations during the first year and no fewer than 50 natural gas refuelling stations shall be established within three years. With the entry into the natural gas business, we believe that the joint venture will provide additional income and strengthen our revenue base so as to bring a steady return to our shareholders.”

Shanghai Dongfu is principally engaged in the wholesaling of refined oil, fuel oil and petrochemical products in Shanghai and its adjacent area. With a client base of more than 1,500 customers, it is the core dealer and the supplier of refined oil of China Petroleum & Chemical Corporation, PetroChina Company Limited, and CNOOC Limited.