With the rapid development of Chinese economy, China chlor-alkali industry made a miraculous progress at the beginning of this century. Both caustic soda capacity and polyvinyl chloride capacity became  No.1 in the world from the year 2003 to 2007. Meanwhile, lots of international chlor-alkali producers, polyvinyl chloride producers and relevant companies are keeping a close eye on China market, reflecting investment, business and technology export in China chlor-alkali industry. In fact, strong Chinese demand is an attractive factor determining the overseas investments in China.

Investing in industry

As the low-cost labour force and strong demand market, several international producers invested in China in recent years. These producers will be shown as follow:

Note:

1.         Hanwha Chemical’s 300,000 mt/yr PVC project in Ningbo and 300,000 mt/yr PVC and 240,000 mt/yr caustic soda project of Indian Zoon cooperated with Sichuan Jiuda Penglai Salt Chem Group have not been built, so these projects have not been listed in this table.

2.         All materials are sourced from open channels.

It seems that these overseas investors are all large chemical groups in chemical industry, and they have many advanced technologies and global marketing channel. In addition, various products could meet diffenent usages from consumers and downstream manufacturers.

These investors, except from Westlake Group and Norsk Hydro A.S., are mainly from NE. Asia,

Especially Korea, Japan and Taiwan. They determined to invest in China mainly due to below reasons.

1.        These NE. Asian countries or regions are island or peninsula countries, where have less resources for chemical production and limited consumption market. As a result, the chlor-alkali industry in these regions need to move out. Eastern coastal regions of China become the preferred region for them.

2.        After the China PVC Anti-dumping case, tonnages from Japan, Korea and Taiwan could not flow into China freely. However, their investments in China on building PVC plants could ensure them to share the big demand market directly. In addition, Polyvinyl chloride plants all adopting ethylene route are determined by the supply of ethylene and EDC/VCM is in their hands. From material to product, the whole chain of PVC is under their control. According to the statistics data from China Custom, there is a half volume of ethylene, VCM/EDC imported as general trade, and others are imported as processing trade with material. This means a half of products flowing into China market, and others are controlled to flow into world market. Althought there has been a difference in business operation between domestic producers and overseas producers, they both enjoyed the rich profit from rapid development of China chlor-alkali market. However, with the coming of potential adjustment caused by the capacity explosion, increased cost, slowdown of demand and heavy competition, the overseas companies in China will also adjust their strategy and show economic viability in the coming years.

Successful business: Global marketing channel

These companies are active in China chlor-alkali industry, having more experiences on Imp. & Exp. business and wide business scope. Their advantages are shown as follow:

Ø         Strong capital support.

Ø         More experiences on chlor-alkali business and stable global marketing channel.

Ø         Huge global logistic system.

Ø         Firm business structure.

Imp. & Exp. condition has changed

Note: The volume below 100 tons is shown as “—”.