Top Biz News
Borouge gearing up for big expansion
By Xiao Wan (China Daily)
Updated: 2010-01-12 08:01
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Petrochemical firm Borouge is expanding its presence in the Chinese chemical market by investing nearly $400 million in three projects, according to a top company official.
The company is setting up a plant and two logistics centers in Shanghai and Guangzhou, said Rashed Saud Al Shamsi, board chairman of Borouge Pte.
The $60 million Shanghai plant will mainly produce plastics products for automotive, infrastructure and packaging sectors, said Al Shamsi. The company is also planning a research and development center in Shanghai, he said.
By having logistics centers in Shanghai and Guangzhou, the company expects to significantly boost trade in China, said Al Shamsi.
The three facilities are expected to go on stream this year, he said.
"With the relative strength of the economy, China will soon become the largest market for polyolefins globally. We will continue our investments in China and support the growth of the market," said Al Shamsi.
Borouge's investment also indicates that energy companies in the Middle East are putting increasing efforts to develop downstream business, he said.
Besides Borouge, many petrochemical companies in the Middle East have accelerated their investment in China. Saudi Aramco, the national oil company of Saudi Arabia, set up an integrated oil refining and petrochemical complex in China along with ExxonMobil and Sinopec in Quanzhou, Fujian province, last November.
The facility has a total investment of around 40 billion yuan. It can produce 7.46 million tons of refined oil, 1.28 million tons of plastics and huge amounts of other chemical products.
Annual sales from the integrated plant will amount to 60 billion yuan, according to China's largest refiner Sinopec.
Last November Saudi Basic Industries Corp (SABIC), one of the world's leading producers of chemicals, inaugurated its new petrochemical complex together with Sinopec in Tianjin. The 50-50 joint venture has total investment of 18.3 billion yuan.
The project can produce 1 million tons of ethylene annually. Ethylene is the most important material in chemicals manufacturing.
This project will help increase Tianjin's annual GDP by more than 4 percent and trigger additional investment of 100 billion yuan in downstream and associated industries, according to Sinopec.
Petrochemical companies in the Middle East, which boasts the largest oil reserves in the world, have incomparable advantages in costs, said Han Xiaoping, chief information officer of China5e.com, a leading energy website in the country. "Companies are expanding aggressively in the world, and they won't neglect China, which is one of the biggest petrochemical markets."
It is beneficial for domestic companies to form partnerships with these companies to find sustainable feedstock, he said.
