Germany-based BASF, one of the global leaders in the chemical industry, plans to invest 1 billion euros (US$1.27 billion) in the Asian market by 2009, with much of the cash expected to come to China.
China is BASF's third-largest market after Germany and the United States and attracted about 2 billion euros (US$2.54 billion) from the company between 2001 and 2005, said Martin Brudermueller, a member of BASF's board of executive directors who is responsible for the company's Asian business.
"We will invest another billion (euros) by 2009 in Asia," Brudermueller added.
He declined to give a detailed breakdown of what would be spent in each particular country, but said China would see a "very big share."
"China is a rising giant in the petrochemical industry worldwide, and we have a long-term commitment to the regional market," he said.
With the new investment in Asia, the company aims to achieve around 10 percent of its global sales and earnings in China for the chemical business by 2010, compared with 6 percent last year.
In 2005, BASF posted revenue of about 2.8 billion euros (US$3.56 billion) in China, a record 43 percent up from the previous year.
Robust growth last year was attributed to the start-up operation of the company's ethylene cracker (production plant) in East China's Jiangsu Province, its largest single investment in its 140-year history, Brudermueller explained.
For this year, the sales increase is expected to be about 20 percent, about the average annual rise of recent years.
BASF and Asia's biggest oil refiner Sinopec last September announced the formal operation of their 50-50 petrochemical plant, also called the Verbund site, in Nanjing, the capital city of Jiangsu.
With a combined investment of US$2.9 billion, Verbund has the capacity to produce about 1.7 million tons of petrochemical products, including ethylene, each year from its 10 chemical complexes.
Sinopec and BASF last year said they planned to expand the Verbund joint-venture by as much as 25 percent to meet surging demand.
But Brudermueller said the German chemical giant is still negotiating with its partner Sinopec and hasn't finalized the deal.
"I cannot tell you any more about this," the BASF official yesterday told reporters in Beijing. But the expansion would remain unchanged at a 25 percent increase, he added.
He also said soaring crude oil prices have had a negative impact on some downstream businesses, but its oil and gas sectors in Europe would help prevent damage to the overall portfolio.
The company aims to increase local manufacturing facilities in China to supply more than 70 percent of sales, compared with 34 percent last year.
(China Daily May 23, 2006)