Sinopec Shanghai Petrochemical Company, a leading player in China’s refining and petrochemical industry, has unveiled plans for a major operational overhaul, committing 21.31 billion yuan ($2.91 billion) to boost its capacity and efficiency. The investment is set to enhance the company’s crude oil processing capabilities, streamline its refining operations, and improve the production of key materials in the chemical sector.

The extensive upgrade involves the decommissioning of 18 aging oil refining units, which will be replaced with state-of-the-art facilities designed to improve both operational efficiency and environmental sustainability. The newly installed refining units will have a combined ethylene production capacity of 1.20 million tons per year, a significant increase that will boost Sinopec Shanghai Petrochemical’s output of essential chemicals. Ethylene is a critical building block for a wide range of petrochemical products, including plastics, detergents, and synthetic fibres, making this upgrade a crucial step for the company in meeting growing demand for these materials.

The company has outlined a strategic vision to increase the production of high-value new material products, including advanced polymers and other chemicals used in industries such as automotive, electronics, and healthcare. By enhancing its refining infrastructure, Sinopec Shanghai Petrochemical is positioning itself to address market shifts toward more sustainable, high-performance materials that are increasingly in demand across diverse sectors.

The investment plan also includes initiatives to expand the company’s raw material production capacity, which will provide critical feedstock for both domestic and global markets. This move comes as Sinopec Shanghai Petrochemical seeks to secure a competitive edge in an increasingly volatile global chemical market, driven by shifting demand patterns, environmental regulations, and the transition to more sustainable production methods.

The ambitious upgrade is expected to take three years to complete, pending shareholder approval. Once the main construction phase concludes, Sinopec Shanghai Petrochemical aims to have a more flexible and resilient production setup, able to adapt to changing market conditions and technological advancements. With the addition of advanced refining units, the company will also reduce its carbon footprint by improving energy efficiency and adopting cleaner processing technologies.

As part of its broader strategy, Sinopec Shanghai Petrochemical is committed to supporting China’s national goals for reducing industrial emissions and promoting sustainable growth in the chemical industry. The company’s upgrade not only strengthens its position as a major player in the petrochemical market but also aligns with global trends toward more sustainable and efficient chemical manufacturing processes.

With this $2.91 billion investment, Sinopec Shanghai Petrochemical is poised to redefine its operations, enhance its product offerings, and contribute to the broader transition toward a more sustainable and circular economy in the global chemical sector.