Work starts on BASF chemical plant

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.