01 June 1995 00:00 [Source: APC]
A manufacturing and construction boom has seen the demand for speciality and fine chemicals in China soar. Alan Tyler reports.
AFTER YEARS of concentrating on the heavy industries of oil refining and petrochemicals, China is now shifting its focus to specialities. Earlier this year the Ministry of Chemical Industries said it planned to boost the output of the sector so that fine and specialities output as a proportion of total chemical output would rise to 50% by the end of the decade, from its present level of less than 40%.
In addition to expanding coatings, dyestuffs and intermediates, in which China is already strong, efforts will be made to boost the output of other key sectors such as surfactants, food additives, feed additives, paper-making chemicals and agrochemicals.
Western chemical companies are focusing heavily on the specialities sector too. According to estimates from BASF, consumption of chemical products in China is currently growing at an annual rate of more than 8%. The volume of the market is expected to increase from US$48bn in 1993 to US$180bn by 2010, representing a huge business opportunity for domestic and foreign firms alike.
Western firms have found more opportunities in joint ventures with Chinese firms than they have further upstream in the petrochemicals sector. Europeans are well represented with BASF, Bayer, ICI, Ciba and Rhône-Poulenc with joint ventures in several sectors including dyestuffs, coatings, agrochemicals and pharmaceuticals.
The growth of China's textile manufacturing sector has presented opportunities for dyestuffs and dyestuff intermediates. Sandoz of Switzerland and the Tianjin No 5 Dyestuff Chemicals Factory recently signed a deal on two joint ventures.
Together they involve an investment of US$30m and will make dyestuffs and dyestuff intermediates both for export and the domestic market. They should be operational by the end of 1996.
Bayer has formed a partnership with the Wuxi Dyestuffs Factory in Jiangsu province near Shanghai to build a plant for the formulation of disperse dyestuffs. Due to start production in early 1997, the $18m plant will have a capacity of 2000 tonne/year.
The same companies are in partnership to make leather chemicals at a new $20m, 10 000 tonne/year plant due to come onstream in 1997. Bayer has also teamed up with Shanghai Leather Chemicals in this sector to build a 8000 tonne/year leather tanning agents, pigments and binder factory in Shanghai as well as forming a joint venture with Tianjin Bohai Chemical, a large petrochemical company, to make 4000 tonne/year of azodicarbonamide in Tianjin.
Bayer's Agfa subsidiary is also setting up a joint venture with Wuxi Aermei Film & Chemicals Corp to build a $10.5m photo chemicals plant.
Ciba is also involved in the leather sector, having a joint venture with Qingdao Chemical to manufacture leather treatment chemicals in Shandong province.
Akzo Nobel is also increasing its involvement in the mainland, having signed joint ventures to make chlorine chloride in Guangdong province, and organic peroxides and metal alkyds in Tianjin.
Rhône-Poulenc has a venture in the same market with Anli Speciality Chemicals to make acrylic sizing agents for textiles in Suzhou, east of Shanghai. The 2000 tonne/year plant should be onstream by the end of the year.
Monsanto of the US is involved in the production of heat transfer fluids in the same city.
Other US chemical firms involved include DuPont, which has an electronic micro circuit materials project in Dongguan, Guangdong province, due onstream by the end of 1995, as well as an advanced photo mask venture due to start production by the same date. Meanwhile Dow Chemical is reported to be interested in a new epichlorohydrin facility.
United Development and Jiangsu Chemical Plant are to set up an isophthalic acid/trimellitic anhydride facility at Yangzhou, in Jiangsu Province.
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