China’s local chem producers regulatory compliance to benefit foreign competitors – Wacker execs

BURGHAUSEN, Germany (ICIS)–Harsher environmental regulations for chemical producers in China will place all companies in the same playing field, benefiting foreign producers who already complied with stringent rules, two executives at German producer Wacker Chemie said on Wednesday.

Peter Summo, president at Wacker Polymers, and Konrad Bachhuber, vice president for polysilicons, said that the higher standards Wacker conducted its operations under would mean that regulations newly enforced by the Chinese government would not come as a huge shock for the company.

The two executives added that China’s industrial regulations for foreign producers were at times harsher than those in Europe or the US, because they combined elements from both jurisdictions’ regulations.

“Certainly, our high environmental standards, which have put in place regardless of regulation in China, will benefit us now,” said Summo.

His colleague Bachhuber added: “Regulatory standards [for industrial producers] in China are at very high levels and, in some areas, they are stricter than in the EU or the US. What we can see developing in China is that these regulations are being enforced more and more [with all producers, local and foreign].

“Wacker, as a company, has always stuck to these [high regulatory] levels and as they are enforced across China it will create a levelled playing field [for all producers].”

With environmental inspections becoming more stringent, some plants in China have had to shut down in an attempt to clean up the country’s air as the public grew tired of heavy pollution.

While employment in the industrial sectors may decrease because of these actions, other sectors would pick up the slack and create healthier growth, the executives said.

“They are switching to quality growth, and this will also create growth. They are not focused as much as in the past on volume growth, on more output, and they are now transitioning into more efficient methods and a better use of raw materials,” said Bachhuber.

All in all, local producers who so far did not fully comply with strict environmental regulations will need to step up their game, which ultimately would add a cost burden which other foreign producers already budgeted for years ago.

“We have always been in accordance with all these stringent rules for foreign investments, which were higher than for local producers, so local competitors will have to come to the same levels we are at, putting additional costs on their plants,” said Summo.