Related Party Transactions and Relationships and Transactions With Certain Other Parties
 3 Months Ended
Mar. 31, 2014
Related Party Transactions [Abstract]  
RELATED PARTY TRANSACTIONS AND RELATIONSHIPS AND TRANSACTIONS WITH CERTAIN OTHER PARTIES
13
RELATED PARTY TRANSACTIONS AND RELATIONSHIPS AND TRANSACTIONS WITH CERTAIN OTHER PARTIES
 
(A) Related Party Transactions
 
The Company considers all transactions with the following parties to be related party transactions.
 
Name of parties
  
Relationship
Mr. Chunfeng Tao
  
Majority stockholder
     
Mr. Jicun Wang
  
Principal stockholder
     
Mr. Peijun Chen
  
Principal stockholder
     
Ms. Sumei Chen
  
Member of the Company’s Board of Supervisors and spouse of Mr. Wang
     
Ms. Yushui Huang
  
Vice President of Administration, Ningbo Keyuan
     
Ningbo Pacific Ocean Shipping Co., Ltd
(Ningbo Pacific)
  
100% ownership by Mr. Wang
     
Ningbo Hengfa Metal Product Co., Ltd
(Ningbo Hengfa, former name "Ningbo Tenglong")
  
100% ownership by Mr. Chen
     
Ningbo Xinhe Logistic Co., Ltd
(Ningbo Xinhe)
  
10% ownership by Ms. Huang
 
Related party transactions and amounts outstanding with the related parties as of and for the three months ended March 31, 2014 and 2013, are summarized as follows:
 
   
Three months ended
March 31
  
   
2014
    
2013
  
    ($’000)     ($’000)  
   
(Unaudited)
    
(Unaudited)
  
Purchase of transportation services (a)
   $ 1,127     $ 628  
Loan guarantee fee (b)
   $ -     $ 23  
Advance payments to related parties (c)
   $ 41     $ 698  
Amounts due to related parties (d)
   $ 238     $ -  
 
(a) The Group purchased transportation services of $1.1 million and approximately $0.6 million from Ningbo Xinhe during the three months ended March 31, 2014 and 2013, respectively.
 
(b) Guarantees for Bank Loans
 
   
Guarantee provided during for three months ended March 31,
    
Bank loans Guaranteed as of
  
   
2014
    
2013
    
March 31,
2014
    
December 31,
2013
  
    ($’000)     ($’000)     ($’000)     ($’000)  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
          
Mr. Tao
     -       -       -       -  
Jicun Wang and Sumei Chen
     -       -       -       -  
Ningbo Pacific
     -       -     $ -     $ 70,086  
Total
     -       -     $ -     $ 70,086  
 
Beginning in 2011, loan guarantee fees of 0.3% of the loan principal guaranteed are to be paid quarterly. During the three months ended March 31, 2014 and 2013, loan guarantee fees were nil and approximately $0.02 million, respectively, for Ningbo Pacific.
 
(c) Advance payments to related parties consist of advances made for business purposes to Mr. Tao. These amounts are unsecured interest free and due on demand.
 
(d) At March 31, 2014, approximately $0.2 million was due to Ningbo Xinhe.
 
(B) Relationships and transactions with certain other parties

The Group has the following relationships and transactions with certain other parties:
 
Name of parties                                
  
Relationship                      
Ningbo Litong Petrochemical Co., Ltd
(Ningbo Litong)
  
Former 12.75% nominee shareholder of Ningbo Keyuan
     
Ningbo Anqi Petrochemical Co., Ltd
(Ningbo Anqi)
  
A related party through September 2011 when control transferred
     
Ningbo Lide Investment Co., Ltd.
(Ningbo Lide) (formerly Ningbo Kewei)
  
A related party through September 2011 when control transferred
     
Ningbo Kunde Petrochemical Co, Ltd.
(Ningbo Kunde)
  
A related party through September 2011 when control transferred
 
Transactions and amounts outstanding with these parties for the three months ended March 31, 2014 and 2013 are summarized as follows:
 
   
Three months ended
March 31,
  
   
2014
    
2013
  
    ($’000)     ($’000)  
   
(Unaudited)
    
(Unaudited)
  
Sales of products (e)
   $ 5,386     $ 41,072  
Purchase of raw materials (f)
   $ 10,782     $ 26,716  
Guarantee for bank borrowings (g)
   $ -     $ -  
Loan guarantee fees (g)
   $ 634     $ 517  
Amounts due to these parties (h)
   $ -     $ 851  
Advance payments to these parties (i)
   $ 33,012     $ 26,560  
 
(e) The Group sold finished products of approximately $5.4 million and $10.2 million to Ningbo Litong during the three months ended March 31, 2014 and 2013, respectively, and sold finished products of nil and $30.9 million to Ningbo Kunde during the three months ended March 31, 2014 and 2013, respectively.
 
(f) During the three months ended March 31, 2014, the Group purchased raw materials of approximately $10.3 million and $0.5 million from Litong and Lide, respectively. During the three months ended March 31, 2013, the Group purchased raw materials of approximately $2.7 million and $24.0 million from Kunde and Lide, respectively.
 
(g) Guarantees for Bank Loans
 
   
Guarantee provided during the three months ended March 31,
    
Bank loans Guaranteed as of
  
   
2014
    
2013
    
March 31,
2014
    
March 31,
2013
  
    ($’000)     ($’000)     ($’000)     ($’000)  
   
(Unaudited)
    
(Unaudited)
    
(Unaudited)
    
(Unaudited)
  
Ningbo Litong
     -     $ -     $ 110,055     $ 56,380  
Ningbo Lide
     -       -     $ 126,397     $ 199,372  
Total
     -     $ -     $ 236,452     $ 255,752  
 
Beginning in 2011, loan guarantee fees of 0.3% of the loan principal guaranteed are to be paid quarterly. During each of the three months ended March 31, 2014 and 2013, loan guarantee fees were approximately $0.2 million for Litong. During the three months ended March 31, 2014 and 2013, loan guarantee fees were approximately $0.4 million and $0.3 million for, respectively, Lide.
 
(h) At March 31, 2013, amounts due to certain other parties consist of amounts due to Kunde and Lide of $0.8 million and $0.1 million, respectively.
 
(i) At March 31, 3014, advance payments to these parties consist of payments to Litong and Lide of $26.7 million and $6.3 million, respectively.