Page 166 - CW E-Magazine (30-7-2024)

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The growth of China’s chemical industry and lessons print in specialty and high value chemi- foreign producers to invest in the country. Some of the other international
cals fi nding application in areas such Many European and US companies have companies with substantial presence in
for India as electronics, semiconductors, plastics invested in China due to the attraction of China are:
used in automobiles, aviation and space. the domestic markets, in contrast to the  LG Chem, which manufactures petro-

The innovations and developments tak- stagnancy in their local markets. chemicals, advanced materials, and
hina is the largest producer and Germany ($11.6-bn) and Taiwan B.G. SAMPAT ing place are evident in the rising num- life science products in China.
consumer of chemicals in the ($8.27-bn). Email: bgsampat@gmail.com

Cworld. Its large production vol- ber of new patent applications. China The other source of technology  SK Innovation (South Korea),
has already overtaken Europe in this has been the coming home of senior
with focus on refi ning and petro-
umes and competitive pricing has made Supply chain integration (PE) 36-mtpa, polypropylene (PP) aspect and will soon overtake USA in executives and scientists working abroad. chemicals.
it a very important constituent of global The Chinese chemical industry is 95.5-mtpa; and polyvinyl chloride terms of patents fi led. Their skill base has helped Chinese  Mitsui Chemicals (Japan), which
value chains and integral to numerous deeply integrated into global supply (PVC) 33.8-mtpa. companies catch up. manufactures performance mate-
industries worldwide. chains, supplying essential raw materials One advantage enjoyed by China is rials, basic chemicals, and func-
and intermediates to sectors like pharma- China has also overtaken the US as
The total market value of Chinese ceuticals, automotives, electronics and the world’s largest refi ning center. Its that its domestic market of specialty and Some of the large chemical compa- tional materials.
chemical output is $1.5-trillion, and it agriculture. Chinese production of active total refi ning capacity stood at 17.8-mbpd performance chemicals is expanding nies that have made substantial invest-  Asahi Kasei (Japan), focusing on
electronics materials and healthcare.
due to large production of automobiles, ments in China include BASF, DOW,
constitutes almost 40% of global produc- pharmaceutical ingredients (APIs) (million barrels per day) at the end of electronics and investments in renew- Evonik, LG Chem and Mitsui Chemicals.  PTT Chemical (Thailand), focusing
tion of chemicals. This dominance is evi- account for over 40% of global supply. 2022 and is expected to reach 19.7- able energy. on production and marketing of
dent across various segments including mbpd in 2025. These refi neries provide BASF, for example, has invested petrochemicals.
basic chemicals, specialty chemicals and One segment which has seen volatili- naphtha feedstock for crackers, which Till recently, China was dependent more than $10-bn between 2013 and
chemicals based on coal. ty due to reduction of Chinese production are expected to add 8.7-mtpa of new on other countries for high quality pro- 2020 in China. It has large production Overseas investments by China’s
is phosphorus. China accounts for ~80% ethylene capacity over 2024-28. Propane
The total contribution of China to of global production of phosphorus and dehydrogenation (PDH) units will add ducts, high-end equipment and leading hubs in Shanghai, Nanjing and Chongqing, chemical companies
global trade also shows its importance in if there is any reduction in production around 5.6-mpta of propylene capacity technology. In 2018, the Massachusetts and employs about 11,411 people in the To expand global footprint and reach,
Institute of Technology (MIT) that about country. It currently operates 26 major China’s chemical companies have also
global value chains. there, there is steep rise in its price. over same period.
18% of basic chemicals were not being wholly owned subsidiaries, 10 major started acquiring foreign companies.
produced in China and more than half of joint ventures and has 23 sales offi ces in
China’s chemical exports in 2022 China is also a dominant producer of Another area of growth is the poly-
were worth around $250-bn, making in rare earth elements, which are important ester chain with 11.1-mtpa of para-xylene specialty chemicals needed were still China. Its business spans petrochemi- Focus on speciality chemicals
cals, intermediates, performance mate-
In China’s 14th Five Year Plan
being imported in China.
the second largest exporter globally. The constituents of semiconductors used in capacity expected for production of rials, catalysts, coatings, care chemicals, (2021-2025) the emphasis is on specialty
primary destination of exports were USA electronics, space and automotive indus- polyester precursors. China will have International investments in China nutrition & health, etc., and reported chemicals, and most of the sector is
($23-bn), India ($19.1-bn), South Korea tries, among other uses. China can virtu- monoethylene glycol MEG capacity One way China has reduced the sales of €11.6-bn in 2022 in greater included in the government list of
($11.1-bn), Brazil ($14.5-bn) and Japan ally hold the world to ransom by stopping additions of 3.6-mtpa and additional import dependence, especially in commo- China. This made the country BASF’s “Encourage Segment.” These will enjoy tax
($13.2-bn). supply of rare earth elements. styrene monomer capacity of 5.9-mtpa. dity chemicals, is by encouragingly second largest market after USA. breaks, reduced import duties and R&D
All these capacity additions will make
In 2022, China imported $161-bn Capacity build-up China self-suffi cient in basic building Table 2: Chinese chemical companies actively acquiring foreign companies
worth of chemical products, ranking it as China produced 31-mt of ethylene blocks. Company Target company Year Key gain
the largest importer worldwide. The main in 2023 and by 2028 it is expected to ChemChina Syngenta (Switzerland) 2017 Access to global markets, advanced seed & pesticide
sources of imports were USA ($20.3-bn), produce 50-mt. Thermoplastics produc- Besides petrochemicals, China is technologies.
South Korea ($20-bn), Japan ($13.2-bn), tion capacity is as follows: polyethylene also expanding its manufacturing foot-
Sinopec Aportuguesa Gas (Portugal) 2011 Entry point to European gas markets.
Table 1: China is important market for many western chemical companies Wanhua Chemical Huntsman Polyurethanes (US) 2018 Expertise in polyurethane technology.
Allnex “China has become Allnex’s largest single country market and a strategic base in the world”. Wanhua Chemical Group Borsod Chem (Hungary) 2018 Acquisition of MDI (Methylene Diphenyl Diisocyanate)
Arkema “As the second largest national market for the group, the Chinese market plays a pivotal ride. production capacity, a key raw material in polyurethane
BASF “The major part of all growth globally is in China”. foams.
Celanese “Celanese is committed to expanding its leadership position in the region”. LyondellBasell (US) Equistar Chemicals (US) 2015 Increased polyethylene production capacity in North
Covestro “China and Asia are central to our global strategy”. (partially owned by America.
Chinese private equity)
Dow “Dow has vision to grow China Dow’s largest market”. China National Bluestar AkzoNobel Specialty 2018 Entry into the high-margin performance chemicals
Evonik “Evonik regards China as one of the driving forces of the global economy”. Chemicals (Netherlands) market.
Lanxess “Asia, in particular China, is a key growth region for Lanxesss”. Shengyi Technology A Schulman (US) 2016 Enhanced capabilities in specialty engineering plastics.
Wacker “China has become Wacker’s top market worldwide”. China Molybdenum NexTech Alloys 2019 Acquisition of rare earth mining and processing assets.

166 Chemical Weekly July 30, 2024 Chemical Weekly July 30, 2024 167

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