Although the impact of the global financial crisis has continued, the enthusiasm of transnational chemical companies investing in China has quietly increased since the second half of 2009. Industry insiders pointed out that the Chinese government's implementation of a series of policies to expand domestic demand and the implementation of the ten major industrial restructuring and rejuvenation plans launched in response to the financial crisis have made the Chinese market "splendid" in the slow recovery of the global economy. As a result, many multinational companies have grown their businesses. Hopes are pinned on the Chinese market.
Expand local production capacity
In recent months, the expansion of transnational chemical companies has been in full swing. The goal of increasing investment is also very clear: to provide reliable supply chain support for its operations in China.
On October 21, WACKER and Dow Corning announced that the Zhangjiagang joint venture plant that invested tens of millions of euros broke ground in the second phase; on October 27, Celanese announced that it would double the capacity of the vinyl acetate-ethylene copolymer emulsion at the Nanjing site; November , Lanxess announced the expansion of the Shanghai Jinshan black iron oxide pigment production line, which guarantees the supply of raw materials for LANXESS Shanghai pigment mill base; later, LANXESS Wuxi completed the new production line of leather chemicals, with an annual output of 1,800 tons. In the future, the production line will be further expanded. On November 16, the new WACKER Chemical Group's redispersible polymer powder and VAE emulsion production base was formally put into use in Nanjing, which is currently the largest of its kind in China.
“The new plant is extremely cost-competitive and can flexibly meet the needs of the local market and will surely provide reliable supply chain support for WACKER POLYMERS' business in China,†said Auguste Williams, director of Wacker Chemie AG. Reporter: The first phase of the Nanjing production base invested more than 50 million Euros to build a complete production line from VAE emulsions to redispersible polymer powders. Together with WACKER's Burghausen plant, it became the world’s largest redispersible polymer powder production plant. .
Looking to the Chinese market
The growth of business in the Chinese market is also one of the main driving forces for multinational chemical companies to lay out China.
According to the LANXESS Group's third-quarter 2009 financial report, sales in Greater China reached EUR 172 million, a 21% increase compared to the same period in 2008 and accounted for 12.5% ​​of global sales. The CEO of LANXESS Greater China, Ke Maoting, said: "The government-led economic stimulus measures have brought a lot of demand, especially in the automotive industry."
WACKER's financial report for the third quarter of 2009 also showed that the main driving force for business recovery came from Asia, especially the Chinese market. In Asia, WACKER's sales amounted to EUR 354.4 million, accounting for approximately 36% of the Group's sales, compared to 30% in the same period of last year.
Williams said that in the Chinese market, in addition to the poor performance of WACKER in the first quarter of this year, other times the performance has been rising. So far, sales have been basically the same as last year. "The annual production capacity of the Nanjing production base has exceeded the current total demand in the Chinese market so that the supply can be increased in time for future market growth."
But optimistically, Williams also remained cautious: "This year, China's sustained economic growth is mainly driven by policies. Next year, China will continue to maintain its upward momentum, and it will inevitably require real pull of domestic demand."