The German giant's US$290 million Shanghai project is part of its push into China's growth sector German petrochemical giant BASF yesterday started work on a state-of-the-art chemical plant costing about US$290 million as part of its push into the mainland market. Top company officials and Shanghai vice-mayor Zhou Yupeng gathered under the blazing sun to lay the cornerstone in the Shanghai Chemical Industry Park at Caojing, next to Hangzhou Bay, about 40km from the city centre. The plant, due for completion at the end of next year, will produce an annual 60,000 tonnes of PolyTHK and 80,000 tonnes of THF, used to make elastic spandex fibres widely used in the textile industry. Most of the output will be sold in China. Andreas Kreimeyer, executive board member for the Asia-Pacific, said the plant was part of a substantial expansion into the Asian market. 'The future of the chemicals industry is in Asia, especially China,' he said. 'By 2010, Asia will account for 20 per cent of our global sales and we aim to build a local manufacturing base that will supply 70 per cent of our regional turnover. Since 1996, sales in the region have grown by 6 per cent a year.' Last year BASF sold 4.2 billion euros (HK$35.41 billion) worth of goods in the Asia-Pacific, of which Greater China accounted for 30 per cent. Mr Kreimeyer said that, between 1990 and 2001, the company had invested 2.6 billion euros in the Asia-Pacific and would invest three billion between 2001 and 2005. Despite heavy spending on new production capacity, China remained dependant on imports of chemicals because demand was rising so quickly, company officials said. Imports accounted for an average of 50 per cent of consumption. The new plant is in the industrial park, covering an area of 28 square kilometres, which when completed will be the biggest chemical site in Asia. A few kilometres from the new plant is a BP factory, under construction and involving US$2.7 billion, one of three giant cracker projects being built by European companies. Shell is building one and BASF has the third project in Nanjing, a 50:50 joint venture with Sinopec involving an investment of 2.9 billion euros. When all the plants begin commercial operations in 2005, they are due to produce 1.7 million tonnes of chemicals and polymers for the domestic market annually. The new plant inaugurated yesterday is wholly owned by BASF and also the largest PolyTHF factory in the world. It will be the first worldwide to use proprietary technology developed by BASF. In total, it has 10 wholly owned subsidiaries and seven joint ventures in China, employing 2,600 people. In 1996, it founded a holding firm in Beijing to integrate all operations, acting as a sales agent and distributor, and providing corporate services for the ventures.