Business

Nalco Holding Co, which makes chemicals for water treatment, aims to double China sales in five years as it takes advantage of the government’s promotion of sustainable growth.

The United States company, which was the only firm added to billionaire investor Warren Buffett’s stock portfolio in the fourth quarter last year, views China the “top priority” for growth and new investment, Chairman and CEO Erik Fyrwald said yesterday.

Nalco last year matched its largest sales growth in a decade, expanding 7.8 percent to US$4.21 billion. China sales were about US$150 million.

“We aim to double our China sales within five years and expect China to grow from our fourth-largest to the second-largest market within five years or less,” Fyrwald said, adding the country would eventually become Nalco’s biggest market. “The only limitation I’ve ever seen to China’s fast growth are the challenges from environment, water and energy.”

Nalco provides integrated water treatment and process improvement services, chemicals and equipment programs to a range of end markets including petroleum, steel, paper as well as food and beverage. For example, Nalco provides coal-fired power production technology that helps reduce harmful emissions.

Nalco announced yesterday that it has appointed Ying Yeh, the former chairman and president for North Asia for Eastman Kodak Co, as its group vice president and chairman for Nalco China.

Nalco plans to double its headcount in China over several years from more than 500 at the end of 2008.

(Shanghai Daily May 5, 2009)

The industrial production of China’s chemical sector increased 2.4 percent year on year in the first two months, and the falling trend for major product’s output was eased, according to data released by the Ministry of Industry and Information Technology (MIIT) on Friday.

The figure was calculated based on the comparable working days in the first two months, since China’s Lunar New Year holiday fell in February last year, but in January this year.

Zhu Hongren, official with the MIIT said although the output expansion was marginal, the contracting trend for the production of major chemical products was eased.

Of the major 30 chemical products monitored by the ministry, 21 saw output falling in the first two months, but the falling rate was tempered from that in December. In addition, three products saw output get back to growth.

To support the annual “Spring Plough” season, the output of major three chemical fertilizer rose 4.6 percent to 8.75 million tonnes through January to February.

The pesticide production grew 9.1 percent to 394,000 tonnes in the first two months, and that for February alone jumped 14.4 percent.

Zhu Hongren said despite of the easing contraction, it was too early to be optimistic, citing the chemical industry faced the most difficult condition comparing with other raw material producing sectors.

China’s industrial output rose 5.2 percent year on year in the first two months, with the growth slowing from December, MIIT said last week.

The figure was 0.5 percentage point lower than in December, dragged down by plummeting exports and high inventories, according to MIIT.

Experts said the figure showed Chinese industry was still feeling the pinch of the global downturn.

(Xinhua News Agency April 4, 2009)

German specialty chemicals manufacturer Lanxess

China National Chemical Corp (ChemChina) is planning to invest 50 billion yuan to build a large production site in Tianjin over the next five years.

The chemicals producer is also planning to have 10 production sites nationwide, including Shenyang in Liaoning, Nantong in Jiangsu and Chengdu in Sichuan, Ren Jianxin, president of ChemChina told China Daily in an exclusive interview.

ChemChina is investing 26 billion yuan in the next three years for the Tianjin facility, said Ren. It will focus on the production of new chemical products.

The Tianjin site will manufacture two important chemicals, methionine and organic silicon, said Ren. ChemChina has now become one of the world’s leading manufacturers of the two materials.

“We will build our Tianjin site into one of the largest manufacturing bases for methionine and organic silicon in the world, and bulk of the products will be exported,” said Ren.

In 2006, China National Bluestar Group Corp (Bluestar), a ChemChina subsidiary, acquired France-based Adisseo Group, a leading global animal nutrition feed firm specializing in the production of methionine, vitamins and biological enzymes.

In the same year, Bluestar bought another French company Rhodia’s organic silicon business, including its patents, manufacturing equipment and distribution channels.

The two deals have greatly enhanced ChemChina’s manufacturing capacity for the two materials, said Ren.

“We are committed to a long-term strategy of developing new chemical products,” said Ren.

Energy-efficient and environmentally friendly products will become ever more important to the world in the future. This is also what ChemChina will focus on in the next decade, he said.

Established in 2004, ChemChina has already consolidated its business into six units – innovative chemical materials and specialty chemicals, oil processing and refining products, chlor-alkali chemicals, agrochemicals, rubber products and chemical equipment. Ren said his plan for each unit is “to develop their business as the largest in China and one among the top three in the world”.

Although China’s chemical industry has been facing a slowdown since last September due to the financial crisis, Ren said he still expects ChemChina to achieve “10 percent growth in sales this year”.

China’s stimulus package for the petrochemical industry is “timely rain” for the sector, and ChemChina will take advantage of this to further boost the company’s project development, he said.

China announced its stimulus package for the petrochemical industry in February.

(China Daily March 19, 2009)

China National BlueStar (Group) Co, a State-owned chemical enterprise, plans to offload all of its shares in its subsidiary BlueStar Cleaning Co.

BlueStar Group will sell 81.92 million shares, or 27.08 percent of Shenzhen-listed BlueStar Cleaning’s total, according to a statement the Shenzhen-listed company filed on Tuesday.

The statement did not say how much BlueStar, which has three listed arms, will get from the share sale.

It is seen as a step by the BlueStar Group to consolidate its assets and get them all listed in the future, analysts said.

Shares of the BlueStar Cleaning Co, an industrial detergent producer, have suspended trading since March 5.

The Blackstone Group purchased 20 percent of BlueStar Group’s stake for US$600 million in October 2008.

(China Daily March 11, 2009)

German detergents-to-glue group Henkel AG said its China sales jumped 48 percent to 4.8 billion yuan (US$700 million) last year, despite the difficult economic period.

Comparatively, its global sales rose 8.1 percent to 14.1 billion euros (US$17.9 billion) last year.

Henkel’s acquisition of most of National Starch and Chemical Co in April helped boost its sales of industrial adhesives globally, particularly in Asia. The Asia Pacific accounted for 11 percent of Henkel’s global sales last year, a rise from 8 percent a year earlier.

“We finished last year with many success stories, seeing growth and gaining market share in Asia and particularly in China,” Jan-Dirk Auris, president of Henkel Asia Pacific, said in Shanghai, adding he’s confident of maintaining and even lifting the “quality of our business” in China.

Henkel’s diversified product offering, ranging from detergents to cosmetics and adhesives, helps it weather the global economic slowdown. Even so, Auris said the businesses for adhesives for building, automotive and electronics sectors are feeling the pinch in particular.

(Shanghai Daily March 2, 2009)

China’s petrochemical industry today posted negative growth in income for December 2008, the first decline in ten years, said an industry association.

Total turnover in the sector in December 2008 fell 6.8 percent from a year earlier, reflecting the accelerated slowdown since last September after the outbreak of the global financial crisis, said China Petroleum and Chemical Industry Association in a report today.

China’s petrochemical enterprises posted a combined turnover of 6.58 trillion yuan (US$963.4 billion) for 2008, an increase of 24 percent from a year earlier.

(China Daily February 13, 2009)

The Shanghai Chemical Industry Park, home to major global firms such as BP Plc and Bayer AG, posted nearly zero growth in 2008 sales due to falling product prices and weak demand amid an economic downturn.

Still, the park aims to grow by double digits this year and expects new investments to remain high as most investors are still optimistic about China’s chemical market.

Sales totaled 51.54 billion yuan (US$7.5 billion) last year, data released yesterday showed, only slightly up from 51.13 billion yuan in 2007 when they jumped 48.7 percent. The park sees sales to grow 10.3 percent to 57 billion yuan this year.

Fixed-asset investment at the park, some 50 kilometers southwest of downtown Shanghai, totaled 8.1 billion yuan in 2008 or 35 percent above its target. The park authorities forecast 8.5 billion yuan worth of FAI this year. The park also aims to attract new investment of US$3.5 billion this year, only slightly lower than last year’s record high of US$3.74 billion.

“So far, lots of companies still favor the China market and said they would stick to their plans to invest in the park,” said Zhang Yaolun, general manager of SCIP Development Co which runs the park.

Zhang, also the director of the park’s administration commission, said multinational firms including Dow Chemical Co of the United States and Germany’s Evonik Degussa have shown clear intentions to invest or raise investment at SCIP.

Another key task for SCIP is to help Sinopec Corp win government approval for its US$2.5 billion refining project within the year. Zhang said construction of the 12-million-ton-a-year project could start as soon as it gets the go-ahead.

(Shanghai Daily February 11, 2009)

Tianchen, a subsidiary of China National Chemical Engineering Co (CNCEC), has signed a US$440 million Design-Build contract with the UK-based European Nickel PLC on a nickel project in Turkey.

The project will yield 20,000 tons of nickel products per year, according to a statement from the State-owned Assets Supervision and Administration Commission under the State Council.

When completed, half of the nickel products will be imported to China, the statement said.

(China Daily January 13, 2009)

China National Chemical Corp (ChemChina) said it has applied for 388 patents in 2008, an increase of 76.4 percent from a year earlier.

Among them 317 had been approved, up 9.7 percent from 2007.

Technology improvement has become a focus for ChemChina, said Ren Jianxin, chairman. ChemChina is the country’s major manufacturer of new material and specialty chemical products.

Established in 2004. ChemChina was the result of a restructuring of several enterprises under the former Ministry of Chemical Industry.

In October, the company made headline news by selling a 20 percent stake in its subsidiary China National Bluestar Group Corp (Bluestar) to US private equity firm Blackstone Group for $600 million. It was the first time a State-owned company had invited a foreign company to be a strategic investor.

Overseas development is a key factor in driving ChemChina’s future growth, said Ren Jianxin, chairman of the company.

In 2006 ChemChina acquired Adisseo Group of France, a leading global animal nutrition feed manufacturer, specializing in the production of methionine, vitamins and biological enzymes. (Methionine is an amino acid that helps prevent the build-up of fat in the arteries and is also used to treat depression, arthritis and chronic liver disease.)

In the same year, ChemChina bought another French company, Rhodia’s organic silicon and sulphide businesses.

“The two deals have clearly identified our business focus to be a leading company in new materials and specialty chemical products,” said Ren.

(China Daily December 30, 2008)