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The Huayi Group, one of China's leading chemical firms, is expected to invest about 25 billion yuan (US$3.1 billion) between 2006 and 2010 to further push forward the Shanghai's chemical industry.
The investment, up 20 per cent over spending in the past five years, means more joint venture projects will be launched, said Zhang Peizhang, chairman of Shanghai Huayi (Group) Co.
Zhang disclosed the plan at yesterday's China Chemical Industry Conference, co-sponsored by Huayi and US Chemical Week, without giving details.
Between 2001 and 2005, Huayi injected 15.6 billion yuan (US$1.93 billion) into the city's chemical industry park close to Hangzhou Bay, with two-thirds coming from foreign investors.
"We will focus on creating a win-win result in future co-operation with foreign investors rather than paying more attention to who controls shares in the ventures," he said.
Zhang told China Daily that in the new round of investment, one-fourth of the funds will be used to transform the old Wujing Chemical Industry Base to allow it to produce clean energy sources and new materials.
"More capital will also be needed to speed up the development of the chemical park by launching new projects," he said.
Zhang told conference participants that chemical industry parks will become a major model in developing China's chemical industry in the future.
He predicted that a large number of State-level chemical industry parks will be set up along coastlines, riversides and places where there are abundant resources.
Park projects are being launched in Jiangsu's Nantong, Zhangjiagang and Nanjing, Guangzhou's Huizhou and Maoming, and in Fujian Province and Tianjin, he said.
His words were echoed by Colin McKendrick, Nanhai venture manager of Shell Chemicals Ltd, who said China expects increasing market demand for petrochemicals.
China is expected to need 25.5 million tons of ethylene by 2010. Last year, it consumed 16.48 million tons, 62 per cent of which was imported.
At present, per capita consumption of plastic in China is only 22 kilograms, but the figure in Japan is 87. "China needs more joint ventures in the future to meet the demand, but imports are still necessary," said McKendrick.
Shell is adjusting its global product structure to suit its expansion plans in the Asia-Pacific region and the Middle East. McKendrick said 20 per cent of the company's assets were in the two regions in 2000, which will rise to 35 per cent by 2010.
"We are considering seeking opportunities in China, as well as in other parts of the Asia-Pacific region, and want to find suitable partners," he said.
Most products made in Singapore and the Middle East are now carried to China's coastal areas, which are processed and supplied to markets at home and abroad, he said.
The integrated petrochemical project in Hainan Province, a joint venture between Shell and CNOOC (China National Offshore Oil Corporation) with an investment of US$4.3 billion, will be put into operation at the end of this year. Each firm will take a 50 per cent stake.
(China Daily September 14, 2005)
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