United States oil giant Amoco says its multi-million dollar chemical joint venture in China, due to start production in 1999, will benefit from a price recovery over the next two to three years.
Amoco Chemical Asia-Pacific China projects director Matthew Chu Chai-tou said the purified terephthalic acid (PTA) plant in Zhuhai would escape the cyclical downturn.
PTA is used to make polyester fibre and container resin. The price of PTA has dropped about 50 per cent over the past 12 months to US$510 a tonne.
'China is a place for long-term investment. We do not consider too much about short-term market fluctuations,' Mr Chu said, adding PTA demand would outstrip supply in the country over the next 10 years.
The plant, the mainland's largest foreign-funded chemical joint-venture project, was approved by the State Council in March after eight years of negotiation.
It is strategically located in the south because demand in the region is particularly strong and market potential huge. There is no other PTA plant in the area.