Dow Chemical Co of the United States has US$5 billion of funds to invest in China over the next decade, and hopes its new venture with a Kuwaiti partner could help, its chairman said yesterday.
The huge investment budget excludes a potential multi-billion-dollar coal-to-chemicals project in Shaanxi Province for which Dow and Chinese partner Shenhua Group Corp are conducting a feasibility study, Chairman and Chief Executive Officer Andrew N. Liveris said in Shanghai.
To date, the largest US chemical maker has invested US$500 million and has earmarked another US$400 million in China, its third-largest market behind the US and Germany.
"China is playing a leading role in Dow's global commitments and its business success - and this will only increase in the future," Liveris said, adding Dow seeks a bigger presence in China's booming petrochemical sector.
China has just approved Sinopec Corp's US$5-billion joint venture oil refinery and petrochemical project with Kuwait Petroleum Corp in Guangdong Province, in which Dow and other foreign firms had been in talks to hold a stake.
Liveris said Dow is interested to participate in large integrated refining and petrochemical projects in China, while declining to be more specific on the Sinopec-KPC project yesterday.
Dow recently announced plans to form a landmark US$11-billion equally-owned venture with Petrochemical Industries Co, a unit of KPC.
"Our joint venture with Kuwait means that we have an opportunity to participate if the Kuwaiti petroleum company finds a right project in China," Liveris said.
Wang Jin, an analyst at Orient Securities, said it is a good strategy on Dow's part to use the KPC venture to expand in China.
"China may prefer such partners from Kuwait and Saudi Arabia which can bring crude oil resources for its large petrochemical projects, while western firms typically provide technology and management skills," Wang said.
(Shanghai Daily December 20, 2007)