YCI Announces Definitive Agreement For Investment By Koch Methanol

HOUSTON, Tex. – Yuhuang Chemical Industries Inc. (YCI), a wholly owned subsidiary of Shandong Yuhuang Chemical Company, Ltd. announced today it has entered into a definitive investment agreement with Koch Methanol Investments, LLC (Koch Methanol), whereby Koch Methanol has acquired an indirect minority equity interest in YCI Methanol One, LLC (YCI Methanol). YCI Methanol is currently constructing a $1.85 billion methanol production facility in St. James Parish, LA.

As part of its investment, affiliates of Koch Methanol will receive the exclusive methanol offtake rights from the new facility, as well as construct, own, and operate the methanol terminal assets for the outbound flow of methanol via marine, rail, and truck logistics. YCI Methanol’s facility will be capable of producing approximately1.7 million metric tons of methanol per year.

“The decision by Koch Methanol to invest in YCI Methanol sends a clear signal to the industry about the strength of this facility,” said Dr. Charlie Yao CEO of YCI. “The new facility is located in a region with convenient access to natural gas, a highly skilled workforce, and world class transportation infrastructure, allowing us to be very competitive in our production and distribution. If viable, there is also sufficient land to add a second and third plant.”

“YCI has developed a strong execution plan for this project and we’ve been impressed with the knowledge and dedication of the team driving it forward,” said Jim Sorlie, senior vice president with Koch Methanol. “Our relationship with YCI will allow Koch Methanol to continue providing our customers with a consistent and low-cost supply of IMPCA quality methanol, both in the U.S. and in foreign markets, for years to come. Koch Methanol seeks to build long-term, mutually beneficial relationships and this investment is a good example of the opportunities we look for and we’re very excited to continue to build and grow this relationship.”

Supported by the syndication loan arranged and led by Bank of China, construction on the new facility began in January 2017, and commercial production of methanol is expected to begin in mid-2020.

“Bank of China is proud to facilitate the bilateral investment and trade cooperation between U.S. and China”, said Mr. Raymond Qiao, executive vice president of Bank of China, New York Branch. “This plant will create 100 permanent jobs while construction of the facilities will result in 1,000 construction jobs.”

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About YCI

YCI is building a methanol complex on more than 1200 acres the Company purchased along River Road, between the Mississippi River and La. 3127, in 2015 and on the former site of the old St. James High School in St. James Parish. Construction of the $1.85 billion complex began in January 2017. Yuhuang Chemical first announced the St. James project in St. James Parish, La. in 2014.

About Koch Methanol, LLC

Koch Methanol, LLC and its affiliates are committed to supplying methanol to a global customer base in a competitive and timely manner. Methanol is used in the manufacturing of countless everyday products, including plywood, carpet, fuels and plastics. Koch Methanol, LLC is a subsidiary of Koch Ag & Energy Solutions, LLC with offices in China, Houston, and Wichita, KS. www.kochmethanol.com
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