Business

The global elites of the chemical-based advanced materials industry are now meeting at the Binhai New Area in Tianjin to attend the 2nd International Advanced Materials (Tianjin) Summit held between today and Friday.

Co-organized by the Tianjin municipal government, China National Chemical Corp.(ChemChina), Dechema - Germany’s Society for Chemical Engineering and Biotechnology - and Morgan Stanley, the summit provides a forum for the shared interests of government, enterprises, industry organizations and investors, with focuses on opportunity and responsibility.

The forum is also supported by government ministries and industry organizations such as the National Development and Reform Commission, the Ministry of Science and Technology, and the China Petroleum and Chemical Industry Association.

Leaders from top multinational companies including DSM, Dow, BASF, Celanese AG and Bayer participate in the summit. Managers from five top-ranked Chinese petrochemical corporations - China Petrochemical Corp., China National Offshore Oil Corporation (CNOOC) and ChemChina also attend the summit.

Government leaders, top experts, and enterprise decision-makers will discuss the latest trends in science and technology development and opportunities in the advanced materials industry as well as corporate social responsibility.

Organizers said the summit will deepen communication between government and enterprises so that enterprises can learn policy trends and the voices of businesses can be heard by the government. Domestic and foreign companies will share information on their challenges and achievements to strengthen mutual learning and extend full cooperation.

The summit will also host technology forums on composite materials and aerospace, chemical industry materials and lightweight automotive materials, and membrane materials, water resources and environmental materials.

With the rapid development in recent years in aviation, aerospace, automobiles, electronics, electrical appliances, construction and public utilities, industry insiders say the advanced materials industry has entered its golden age of development.

This year has been particularly noteworthy for China as it officially began its jumbo aircraft project, launched the Shenzhou VII spacecraft and completed construction of the Bird’s Nest and Water Cube, all of which show the importance of advanced materials as a force in science and technology development.

Materials science is the basis and pioneering power in the development to many sectors of modern industry, providing strong technical functions to support national economy and industrial development. Since China entered the era of reform and opening to the outside world, research, development and industrialization of advanced materials have been emphasized by the Chinese government.

In the past 10 years, the government has invested more than 3 billion yuan to finance a series of projects, including key State laboratories, national research centers and important scientific projects.

(China Daily  October 30, 2008)

For Ren Jianxin, chairman of the China National Chemical Corporation (ChemChina), one focus of his work this year is to further boost the company’s business on new materials and specialty chemical products.

Last year ChemChina started the construction of its Tianjin new materials manufacturing base. The project, with an investment of 24.5 billion yuan (US$3.59 billion), is expected to come on stream in 2011.

Once in operation, the base can generate annual sales of around 30 billion yuan. The project will greatly increase ChemChina’s competence in the new materials and specialty chemical products area.

“ChemChina will continue to focus on the development of new materials and specialty chemical products,” Ren said, adding that it is in line with the development of the chemical sector in China.

“Now China has become the world’s largest chemical producer. However, in fields which require advanced technology we still lag far behind the Western countries,” he said.

ChemChina was established in 2004, and was formed following the restructuring of several enterprises under the former Ministry of Chemical Industry. Today it has developed into China’s leading chemical group, with both sales revenue and total assets surpassing 100 billion yuan.

The company’s subsidiary, China National Bluestar Group Corporation (Bluestar), has now become the leading company in new materials and specialty chemical products in China.

Recently, the Internet Corporate Identity System (ICIS), the world’s leading information provider for the chemical and oil industry, unveiled a list of the top 100 global chemical enterprises, featuring the world’s top chemical players ranked by their sales incomes from last year.

ChemChina ranked No. 19, which means the company is now one of the top 20 global chemical companies.

Germany-based BASF once again took the top spot with US$85.3 billion in sales and Dow ranked second with its sales income of US$53.5 billion. Sales income of ChemChina last year reached US$17.4 billion.

ChemChina was also listed as one of the top 500 Chinese enterprises by the National Bureau of Statistics of China, ranking 28. ChemChina remains first among the industry of chemical materials and chemical products.

Ren is leading ChemChina to be more eco-friendly.

“Energy saving and cutting pollution are our most important work this year,” he said.

The company’s theme for this year is: “Zero Emissions”.

This year all the company’s subsidiaries will create their own specific plans for energy conservation and pollution control.

For instance, Jinan Yuxing Chemical Co. has signed an agreement with the local government on pollution controls for the 11th Five-Year Plan period (2006-10). Haohua Yuhang Co. in Jiaozuo in Henan has invested more than 100 million yuan in environmental protection in recent years.

ChemChina has also taken part in several environmentally friendly projects. For example, it built the rainwater recycling system for the Bird’s Nest.

The recycled water is used for washing the stadium, roads, and garages, flushing toilets and for air conditioners, as well as irrigating the land around the venue.

“China’s chemical industry should pay increasing attention to energy and environmental issues, in order to achieve healthier growth,” Ren said.

(China Daily October 30, 2008)

Shanghai Huayi (Group) Co, the largest state-owned chemical company in the city and parent of three listed units, aims to speed up restructuring and get more market-oriented, Chairman Jin Mingda said yesterday.

“We intend to be more open-minded and welcome state-owned enterprises, foreign companies and other strategic investors to participate in our restructuring plan, to answer the city government’s call for state-sector restructuring,” Jin said.

The Shanghai government last month revealed a plan to restructure local state-owned companies to make them more competitive via group listing, asset injection or other capital restructuring.

Huayi has recently announced that it would inject some coal-based chemical making assets to its listed unit Shanghai 3F New Materials Co.

The deal was awaiting regulator approval, Jin said.

“If successful, we will inject other related assets into 3F which could become our listed arm for Huayi’s coal chemicals business,” Jin said.

Jin said Huayi would also cooperate with companies which have access to resources and energy as well as market.

Huayi will today launch a major coal-based chemical base in Chaohu, Anhui Province, Jin announced.

(Shanghai Daily October 16, 2008)

Dow Epoxy, a unit of United States chemical giant Dow Chemical Co, signed a deal with Shanghai Tianyuan Huasheng Chemical Co yesterday to supply key raw materials for its planned new plants.

The local firm, a unit of state-owned Shanghai Huayi (Group) Co, will provide caustic soda and anhydrous hydrogen chloride for Dow’s 100,000-ton-a-year liquid epoxy resins plant and 150,000-ton-a-year glycerine-to-epichlorohydrin plant. It will also receive recycled brine from Dow for chlor-alkali production.

The total value of the 10-year contract is more than US$400 million. The deal underscores the government effort in building a circular economy by maximizing the use of resources and recycling, the companies said.

The two Dow plants, to cost US$420 million, are set to come on line in 2010 and 2011 at the Shanghai Chemical Industry Park, said Patrick Ho, business group president for Dow Epoxy & Specialty Chemicals. They will offer coatings, electrical laminates and civil engineering.

(Shanghai Daily October 16, 2008)

French nuclear engineering company Areva has agreed to sell a 49-percent stake in its uranium mining unit UraMin to China, in a move to boost its strategic partnership in the rapidly growing market.

China Guangdong Nuclear Power Co and China’s sovereign wealth funds will take 49 percent of UraMin, Paris-based Areva said. They did not disclose how much China would pay. Areva acquired Canada’s UraMin for US$2.5 billion last year.

In return, CGNPC would be guaranteed access to more than half of the production of UraMin, which operates mines in Africa. Areva said it would remain the operator of UraMin’s current and future projects while benefiting from additional means of financing its activities from the Chinese investment.

CGNPC Chairman Qian Zhimin said the deal would help secure uranium supply for its nuclear power plants until 2022. In another deal, Areva and CGNPC also agreed to form a joint venture for the engineering and procurement of nuclear power plants.

The venture, 55 percent held by Chinese interests and 45 percent by Areva, would initially focus on CGNPC’s projects in China and later contribute to joint projects abroad. The two agreements are part of an overarching 8-billion-euro (US$10.9 billion) deal between Areva and CGNPC signed late last year.

(Shanghai Daily October 9, 2008)

China National Chemical Corporation (ChemChina) announced Monday that China Bluestar (Group) Co. Ltd., its joint venture in Beijing with the Blackstone Group, has officially launched.

Bluestar, one of ChemChina’s subsidiary company groups, will be transformed into a Sino-foreign joint venture. U.S.-based Blackstone is putting 600 million U.S. dollars into the project for a 20 percent stake in the new company.

ChemChina and Blackstone signed the cooperation agreement in September 2007. It was ratified by the government in December.

A ChinaChem spokesman said the joint venture aimed at internationally-advanced technologies and would build high-tech chemical new materials equipment with self-owned intellectual property. It will draw on Blackstone’s successful experience in the global chemical industry and its advanced management ideas.

ChemChina is one of the country’s state-owned giant enterprises and a leading player in the global chemical industry. It ranked 28th among China’s top 500 enterprises and 19th in global chemical enterprises.

Bluestar has three subsidiary companies listed on the Shanghai and Shenzhen exchanges.

(Xinhua News Agency October 6, 2008)

United States chemicals maker OMNOVA Solutions Inc said yesterday it expected China sales to grow at least 10 percent per year, but warned the US slowdown was having a negative impact on its local operations.

The company, which makes decorative products and performance chemicals, aimed to grow its China business by 10 to 11 percent a year, doubling the local market average in its sector, said John S. Wei, vice president of OMNOVA Solutions China.

Wei declined to give China’s breakdown of OMNOVA’s global sales of around US$840 million. The New York Stock Exchange-listed company employs 635 people in China, nearly a quarter of its total workforce.

OMNOVA, which supplies emulsion polymers, specialty chemicals, decorative and functional surfaces for a variety of sectors from marine and transportation upholstery to shoe and textile manufacturing, said the slowdown of the US economy was biting as part of its China business was export related.

“But our investment in China is long term. Five years out is when China will certainly be dominant in the world economy,” Wei said at a scholarship grant event at Shanghai Jiao Tong University, attended by OMNOVA Chairman and CEO Kevin McMullen.

To improve the situation, OMNOVA would invest in upgrading its two plants for decorative products in China, putting more advanced technology into products and providing more performance-driven products for the marketplace, Wei said. “We want to change the product mix from commodity to more high value added,” he said.

(Shanghai Daily September 25, 2008)

China’s Ministry of Commerce announced on Monday it would initiate on Tuesday the Sunset Review of anti-dumping duties on Styrene Butadiene Rubber (SBR) originating in or exported from Russia, Japan and the Republic of Korea (ROK).

The ministry would not cease imposing anti-dumping duties on these products until the review ended on September 9, 2009, said the ministry in a statement.

Sunset Review is a system ruled by World Trade Organization (WTO) Anti-dumping Agreement and generally implemented by WTO members.

If the review confirms the cancellation of anti-dumping measures will result in further dumping and damage, investigation institutions may decide to implement anti-dumping measures for another five years.

(Xinhua News Agency September 9, 2008)

China’s chemical fiber sector saw a drastic slowdown in production and export in the first half of this year, with its economic returns declining substantially, the China Chemical Fibers Association said on Sunday.

The association ascribed the weak performance largely to lower demand resulting from slowing textiles export and to mounting costs caused by price rises for raw materials, coal, power supply and transport services.

Between January and May, 10.04 million tons of chemical fibers were produced nationwide, a growth of 7.4 percent on the same period of last year, and 753,000 tons were exported, up 27.98 percent. The growth rates were 10.49 percentage points and 20.72 percentage points, respectively,lower than the year-earlier level.

Over the five months, the sector garnered 3.72 billion yuan (544.4 million U.S. dollars) in profits, down 1.36 billion yuan, or 26.77 percent, from the same period of last year.

Approximately 24.13 percent of chemical fibers enterprises nationwide suffered losses, 3.48 percentage points higher than the year-earlier level.

The enterprises in red recorded 2.02 billion yuan in losses, doubling the year-ago level, according to the industry association.

(Xinhua News Agency August 24, 2008)

Shares of domestic potash producers advanced yesterday on speculation the government may lift price control on the nutrient that is used to boost crop yields.

The government has always been looking at lifting the price control although there is no timetable to do so, the China Securities Journal reported yesterday, citing a source at the National Development and Reform Commission.

Fertilizer prices are regulated in China to shield the farming industry, leaving some producers unprofitable in the face of surging raw material costs.

The newspaper said the NDRC has proposed that the government give direct subsidies to farmers in return for lifting the price control on potash. The move to lift price control could lead to the government easing price curbs over other fertilizers in the future, analysts said.

Shares of potash producers rose yesterday on the news while the Shanghai Composite Index tumbled 3.43 percent.

Xinjiang Guannong Fruit & Antler Co surged 7.23 percent to 71.23 yuan (US$10.4) while Inner Mongolia Lantai Industrial Co rose 1.13 percent to 11.59 yuan after soaring as much as 6.46 percent.

China relies on imports for 70 percent of its potash needs, industry officials told the First 2008 World Potash Conference in Shanghai last week.

Potash prices may almost double to US$900 a metric ton, excluding freight costs, over the next two to three years, Paul Matysek, chief executive of Canada’s Potash One Inc, said at the conference, as potash makers have found it hard to match global demand.

(Shanghai Daily July 16, 2008)