Page 168 - CW E-Magazine (30-7-2024)

Special Report

subsidies. Engineering plastics, organo- that specialises in petrochemicals, Today, China is the largest chemical
silicons, organo-fl uoro compounds, coal-to-chemicals and oil refi ning producer in the world and in certain seg-
chemicals for electric vehicles and water industries. ments such as fl uorspar, phosphorus and
treatment membranes are in the priority  Shandong Energy Engineering silicon metal, it is a dominant supplier

list. The plan also prioritises reducing Corporation (SEEC), with proven up to the extent of 70-80% of global
pollution and expanding chemical pro- capabilities in constructing chemi- capacity. Any disturbance in production in
duction in integrated manner, including cal plants, power plants and environ- these sectors could lead to high volati-
by encouraging merger of small compa- mental protection facilities. lity and disrupt global supply chains. In
nies.  China National Chemical Engineer- high-tech areas such as photovoltaics,
ing Co., Ltd. (CNCEC). polyamides, polyurethanes and poly-
Cost competitive manufacturing carbonate, China’s chemical companies
The main reason for Chinese domi- Innovation and technology are leading in technology and manufac-
nation of world markets has been the upgradation turing.
low price offered by producers due While initially China was dependent
to low labour costs and economies of on foreign companies for technology for China is the largest producer of
scale. The Chinese government also bulk chemicals, over time they have deve- coal-based chemicals, which extends
actively supports the chemical industry loped their own technologies and cur- up to production of olefi ns from coal. It
through subsidies, infrastructure deve- rently lead in production of chemicals has highest amount of coal gasifi cation
lopment and industrial policies. Thanks from coal. China today has the highest plants that allow it to produce methanol
to these interventions, China today has number of coal gasifi cation plants in the and ammonia at very competitive prices.
well-established infrastructure and large world, and a major production of meth-
Chemical Parks that supply inputs such anol and PVC is based on coal. China There is ample evidence of chemical
as steam, water, power, etc. to investors. also has the largest number of methanol innovation in the form of patents, R&D
This leads to reduce logistics and other to olefi ns (MTO) plants. spending and highly-cited scholarly arti-
production costs. cles that show rapid progress by Chinese
Many foreign companies have chemical companies and technological
Furthermore, most Chinese plants established R&D centres in China to take institutes. Given past developments in
are large with economies of scale that advantage of the skilled labour and China and other industries, it is quite
translates into 15-20% cost advantage develop products for the Chinese market. likely that China will be on par with
over the competition. foreign chemical producers in terms of
Key takeaways innovation in the near term, while enjoy-
Highly skilled manpower emana- The evolution of China’s chemical ing signifi cant cost advantage.
ting from higher educational institutes industry has been rapid after 2015. The
ensure easy availability of technically evolution has been planned very strate- Lessons for India
skilled manpower. gically and a lot of planning has gone The purpose of this article is not to
into the execution of the strategy. A glorify the achievements and signifi -
Several Chinese companies also major role has been played by governments cance of China’s chemical industry, but
have expertise in engineering and con- in the form of Chemical Parks, incen- to highlight how China has been able to
struction of large chemical plants. They tives and easy availability of basic inputs build an industry from scratch to global
include: such fi nance and infrastructure. China level with planning and good execu-
 Sinopec Group, a State-owned oil sought to fi rst become self-suffi cient in tion. There is lot to learn from the strategy
and gas giant that has expertise in chemicals and then to lead the industry followed to overcome obstacles to
building refi neries, petrochemical globally. growth such as technology access and
plants and other chemical facilities. infrastructure with proper collaboration
 China Petroleum Engineering Cor- China has been able to attract lot of between government, research institutes
poration (CPEC), a subsidiary of foreign capital due to its friendly invest- and industry.
Sinopec, which focuses on engineer- ment policies, and the lure of its large
ing procurement and construction domestic market. Most foreign compa- Indian industry needs strong interac-
services for oil & gas, and chemi- nies that invested large sums of money tion with universities and research insti-
cals. also invested in R&D to develop pro- tutes to support innovation and develop
 Wilson Engineering Services Co. Ltd., ducts for the domestic market. home-grown technologies.

168 Chemical Weekly July 30, 2024

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