Recession to consolidate Chinese chem industry – consultant

17 February 2010 01:45  [Source: ICIS news]

SAN FRANCISCO (ICIS news)--The number of chemical companies in China remains enormous, but the recession has taken a toll, according Minghua Lu, CEO of Pacific Genuity, a US-based chemical trading and consulting company focused on the Chinese market.

Speaking Tuesday in a pre-show event at the InformexUSA exhibition in San Francisco, Lu said that he had been able to identify about 20,000 chemical manufacturers in China, but he believed the actual number was much higher.

“If you include the small mom-and-pop shops, there could be as many as 100,000,” he said.

However, the economic situation has proved too difficult for many of them, he added.

“In the last two years, 10-15% of our clients have gone out of business or changed businesses,” he said.

Lu expected consolidation to benefit China's chemical industry by culling weaker firms, leaving resurgent business to stronger companies.

The consultant noted that tighter environmental controls had proven to be an additional challenge for many companies in coastal regions. Instead of forcing polluting firms out of business, however, the Chinese government was moving them to chemical industrial parks with infrastructure sufficient to enable compliance.

InformexUSA offically begins Wednesday and ends Friday.

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