Hong Kong Kingboard Investment Ltd. announced plans to build a series of chemical plants in Huai'an, Jiangsu province, including a 30,000 ton-per-annum PVC facility, despite the low utilization rate of existing PVC plants in China.

The total investment could reach US$1 billion, according to latest reports from local newspapers. The initial capacity, which is not revealed, is expected to come on stream by the end of 2012.

Overcapacity has kept the national average rate of PVC capacity utilization at low levels for years. The majority of PVC output in China is produced from acetylene derived from calcium carbide, while the ethylene route dominates the rest of the world.

Kingboard said its investment will leverage the inorganic salts chemical industry in Huai'an.

China's PVC resin capacity topped 20 million tons per annum at the end of 2010, while actual output reached just 11.3 million tons.