US chemical giant Huntsman Corp to boost China investment
By Li Wenfang
Updated: 2006-08-24 08:53
US chemical giant Huntsman Corp will step up its investment in China in order
to tap into strong domestic demand in the world's largest market for textile
effects chemicals.
Peter Huntsman, the company's president and chief
executive officer, made the remarks at yesterday's inauguration of Huntsman
Textile Effects (China), in Guangzhou, southern China's Guangdong Province.
The new firm was the result of Huntsman's acquisition of the global
textile effects business of Ciba Specialty Chemicals Holding Inc for US$253
million, which was completed last month.
New York-listed Huntsman has so
far invested US$1 billion in China, including the acquisition of Ciba's
China-based textile effects operations.
Huntsman also has a one-third
share in a US$1 billion Shanghai chemical plant that mainly produces
polyurethane. The project, which also has investment from BASF and Chinese
partners, will become operational today, supplying the shoemaking, automobile
and electrical appliance industries.
The company's sales in China, which
grew from zero in 1978 to US$1 million in 1996, are expected to top US$2 billion
this year, said Huntsman.
He predicted that China's market for textile
effects chemicals will grow by 7 to 10 per cent annually in the coming years and
that Huntsman's sales of those products in the country will increase twice as
fast.
Textile effects chemicals enrich the performance of textile
products, enhancing their colour, reducing creasing and allowing the fabric to
breathe.
Huntsman said he expected China's chemicals market to
grow at an annual rate of 10 to 15 per cent, adding that his firm will develop
its production capacity in China in order to meet this demand, Huntsman
said.
China is the world's largest market for textile effects chemicals,
and Huntsman will expand the capacity of its Guangzhou plant by 30 to 50 per
cent annually over the next two to three years.
Domestic sales of
Huntsman's textile effects products made in China are set to outstrip its
exports in the future, said William Yau, vice-president of Huntsman Textile
Effects Asia Pacific.
Huntsman, which has acquired 35 companies in the
past 25 years and generated revenue of US$13 billion last year, will seek more
opportunities for acquisitions, especially in Asia, Huntsman
said.
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