About Sinopec Shanghai Petrochemical Company

Sinopec Shanghai Petrochemical Company Limited operates as a petrochemical company in the People’s Republic of China (China or the PRC). The company’s highly integrated petrochemical complex processes crude oil into a broad range of products in four major product areas, including synthetic fibers, resins and plastics, intermediate petrochemicals, and petroleum products. The company derives a substantial portion of its revenues from customers in Eastern China (principally Shanghai and its six neighboring provinces). Strategy The company’s development strategy is to focus on both scale and refinement. The key elements of the company's strategy are to strengthen safety and environmental protection and improve the level of intrinsic safety; and focus on transformation and development and promote the development of key projects. Principal Products The company produces four principal types of products with different specifications, including synthetic fibers, resins and plastics, intermediate petrochemicals and petroleum products. The company uses many of the important petroleum products and intermediate petrochemicals it produces in producing its own downstream products. Resins and Plastics and Synthetic Fibers The company processes its intermediate petrochemical products into five kinds of synthetic fiber raw materials, including polyester, acrylonitrile, polypropylene, polyethylene, and PVA. Each of these five products has its own production line or lines. The company further processes polyester and acrylonitrile into various types of synthetic fibers. Polyester – MEG and PTA are fed into a polymerization unit which produces polyester chips and polyester melt. Both chips and melt are used as raw materials in the production of polyester staple and filaments. Some chips are also sold to third parties. Acrylonitrile – The company produces polyacrylonitrile by feeding acrylonitrile into a polymerization unit. By passing the polyacrylonitrile through the fiber unit, acrylic fiber and acrylic staple fiber are produced, including cotton and wool type staple fibers. Wool acrylic staple fiber can be processed into acrylic wool strips. Polypropylene – The company produces polypropylene resins by feeding propylene into a polymerization unit. The company’s fiber grade polypropylene resin is the main ingredient for polypropylene fiber production. Polyethylene – The company has three sets of units producing polypropylene, two of which produce low-density polyethylene (LDPE) using the kettle type process, and the other unit produces all density polypropylene products using the Borstar bimodal process. PVA – Polyvinyl alcohol (PVA) granules are produced from vinyl acetate, derived from ethylene. Suppliers Crude Oil: The crude oil required by the company is purchased through Sinopec Corp., as an agent, from foreign sources and Shanghai Nanguang Petrochemical Co., Ltd., as an agent, from domestic sources. Coal: Majority of the coal used for electricity generation is purchased through a unified system of procurement by Sinopec Corp. The Group’s top five suppliers in 2022 were China International United Petroleum & Chemical Co., Ltd., East China Branch of Sinopec Sales Company Limited, Materials and Equipment Department of China Petroleum and Chemical Corporation, SECCO, and Shanghai Gas Co., Ltd. Customers The Group’s top five customers in 2022 were SINOPEC East China Company, China International United Petroleum & Chemical Co., Ltd., Sinopec Sales Company Limited, Shanghai SECCO Petrochemical Company Limited (SECCO) and Zhejiang Dushan Energy Co., Ltd. Synthetic Fibers: List of customers each accounting for more than 10% of the sales in this segment: Shanghai Dunshan Textile Co., Ltd. and Jiangsu Zhonghuai Textile New Materials Co., Ltd. Intermediate Petrochemicals: List of customers each accounting for more than 10% of sales in this segment: SINOPEC Shanghai Gaoqiao Petroleum Chemical Co., Ltd. and Zhejiang Baling Hengyi Caprolactam Co., Ltd. Jiaxing Petrochemical Company Limited and Oriental Petrochemical (Shanghai) Corporation are the outside consumers of its paraxylene. Petroleum Products: In 2022, the company’s primary gasoline and diesel customer was East China Branch of Sinopec Sales Company Limited. Trading of Petrochemical Products: In 2022, the company’s largest trading customer for petrochemical products was Sinopec Chemical Commercial Holding Company Limited. Sales and Marketing The company sells its products to larger trading companies and industrial users with whom it has long-standing relationships, including Sinopec Group or customers designated by Sinopec Group. Research and Development The company’s research and development expenditures were RMB 130.5 million in 2022. History Sinopec Shanghai Petrochemical Company Limited was founded in 1972.