BASF considers five factories including giant Nanjing plant
German chemical giant BASF is finalising negotiations to set up five more factories, which will help raise total investment in its mainland ventures to about US$3.4 billion by 2003.
BASF (China) chairman Bernd Kremmling said three of the new factories would be in Shanghai and one each in Nanjing and Hainan, bringing to 14 the number of manufacturing plants established or being negotiated.
The Nanjing project - an integrated petrochemical complex estimated to cost about $2.7 billion and to be operational within five years - will be its biggest on the mainland.
BASF will hold a 50 per cent stake, with the other half taken by Yangzi Petrochemical and China Petrochemical Corp (Sinopec).
'We are finishing the feasibility study and will submit it to the State Council and other relevant authorities for final approval by the fourth quarter of the year,' he said.
The State Council last February approved the project proposal, the key component of which was a naphtha cracker which had an annual production capacity of 600,000 tonnes of ethylene.
Talks are also underway to set up two polyurethane precursor plants in Shanghai - one with Britain's Imperial Chemical Industries (ICI) and Japan's Nippon Polyurethane and mainland partners, and the other with Sinopec.
BASF will set up its first mainland wholly owned subsidiary in Shanghai, which will produce dyes and additives.
The subsidiary will invest in several ventures, each costing $10 million.
Mr Kremmling said BASF had also entered into a 50-50 venture with the US firm DuPont for a factory to make and market nylon intermediates in Hainan, estimated to cost $900 million.
The group would develop its Shanghai office into a hub for its business activities to facilitate expansion in the mainland.
'We are making Shanghai our sales, distribution, logistics, information technology support centre for our ventures,' Mr Kremmling said.
The chemical manufacturer now has five of its existing nine mainland joint ventures in Shanghai, which has received investment of about $280 million.
Its remaining four are in Nanjing, Shenyang, Jilin, and Panyu.
Given its rapid expansion, BASF expects mainland sales to triple to about 12 billion yuan (about HK$11.17 billion) by 2005, from last year's 4.3 billion yuan.
'We are aiming to have about 2 per cent of the market share by 2005,' he said.
