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|Saturday, September 29, 2001, updated at 08:53(GMT+8)|
BASF to Operate Chemical ProjectBASF, one of the world's leading chemical producers, Friday launched its heavily funded integrated chemical project in Nanjing, in an effort to compete with its counterparts on the Chinese market.
The project, co-funded by China Petroleum and Chemical Corporation (SINOPEC), will cost US$2.6 billion in investment, with each sharing a 50 per cent stake.
"The project is a milestone in BASF's investment in the Asia-Pacific Rim,'' said Juergen Strube, chairman of the Board of Executive Directors of BASF.
BASF plans to derive 20 per cent of the group sales from Asia's dynamic markets by 2010 and 70 per cent of this amount is to be derived from local production. "The new Verbund site in Nanjing will make a major contribution to this effort,'' said Strube.
"China has been reckoned as a country which is playing an important role in BASF's Asia strategy,'' he said.
The chairman said BASF-YPC (Yangzi Petrochemical Corp) Company Ltd, a joint venture, has been established to operate the project.
This 50-50 joint venture is the largest Sino-German chemical company with an investment of US$2.9 billion, covering a space of 220 hectares.
"BASF-YPC Co Ltd. is our first strategic joint venture with multinationals after the successful listing of SINOPEC Corp in Hong Kong, New York and London simultaneously," said Li Yizhong, chairman of SINOPEC Corp.
Li said the project will further improve the domestic supply and demand of chemical resources and strengthen SINOPEC's competitive edge in the international market.
Upon its completion in 2005, the joint venture will have an annual production capacity of 8.7 million tons of high quality products, including ethylene, ethanediol, polytene, propenoic acid ester.
Strube said BASF decided to explore the prospects for the chemical project in Nanjing within five years by co-operating with Chinese partners. It was only last year that the company received permission to build such an integrated production site with SINOPEC.
He said China constitutes the world's fastest growing market for chemical products and has the greatest potential. "We want to serve this market as soon as possible by launching our ethylene cracker project,'' he said.
Insiders said China's demand for ethylene is growing and at the moment, much of it is imported. Shanghai has co-operated with BP to launch a 900,000-ton ethylene project in its Caojing-based chemical industry zone and Shell is also building a 600,000-ton ethylene plant in Guangdong Province. When these projects are completed, China is expected to have an annual capacity of producing 5.5 million tons of ethylene by the year 2005.
Strube said BASF's ethylene output, by then, will occupy about 10 per cent of China's amount and a large considerable imported chemical products will be replaced by local production.
"The Nanjing plant will be possibly enlarged by growing demand in the market,'' he said.
He said China's robust economy has reinforced BASF's further investment in the country.
"With its entry to the World Trade Organization, China, which is already an important investment site, will become even more attractive to investors,'' Strube said.
He revealed that plans are under negotiation with Huntsman Polyurethanes and Chinese partners to invest US$1 billion in Shanghai's Caojing to build two plants for polyurethane precursors.
Source: China Daily
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