Russian gas processing and petrochemicals company SIBUR and Chinese energy giant Sinopec have signed an agreement during Russian President Vladimir Putin’s state visit to China on Tuesday to create a joint rubber venture in Shanghai.

"The Chinese market is developing dynamically and is oriented at localization. Sinopec has a substantial resource base and holds leading positions on the regional market," SIBUR said in a statement.

"Combined with the innovative technologies of SIBUR to produce nitrile butadiene rubber, it will allow the creation of a modern competitive enterprise on China’s territory as part of a long-term fruitful cooperation between our companies, strengthening SIBUR’s presence in the Asian market," the statement added.

Sinopec and SIBUR will own 74.9 and 25.1 percent of the joint venture, respectively. The sides have also signed a license agreement to produce the rubber at the new plant using SIBUR’s technology. Russian experts will participate in the project

"We are certain that the creation of the new joint venture in Shanghai will allow us to better satisfy the market demand and contribute to Chinese economic development," Sinopec said.

Last year, SIBUR and Sinopec registered a joint venture producing rubber at the Krasnoyarsk synthetic rubber plant, where Sinopec owned 25 percent plus one share. Much of the plant’s production goes to the Chinese market.

Source: RIA Novosti