New Methanol Plant in Shanxi Province Likely to Follow Chinese Chemical Trends

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Researched by Industrial Info Resources (Sugar Land, Texas)--In recent years, China's chemical sector has experienced two strong trends: increased foreign manufacturers moving production facilities to China and greater Chinese demand for chemicals. Foreign manufacturers, such as automobile, electronics and textile manufacturers, require chemical-derived ingredients and materials in their production processes.

While not everyone owns a car or can afford one, everyone requires chemicals for some area of their life. In 2009, China saw almost $550 billion in global chemical shipments, which is about 15% of the world's annual chemical sales. By 2013, China is expected to top $1 trillion in chemical shipments and exceed 16% of the world's total sales.

Another driving force, though perhaps a minor one, is the implementation of policies that are forcing smaller, less-efficient chemical facilities in China to shut down. Power consumption in the sector has swelled more than 15% since 2000. In the place of the obsolete, energy-guzzling plants, larger, more energy-efficient chemical plants are springing up. These new production facilities are promoting higher yields and lower carbon dioxide emissions.

Construction on several mid-size to large-scale projects is scheduled to commence between the fourth quarter of 2010 and the second quarter of 2011. Chinese and foreign companies alike plan to invest more than $4 billion in these projects.

A $1.5 billion methanol plant will be constructed in the Jincheng Chemical Complex, 380 kilometers from Beijing in the Shanxi province. Shanxi Lanhua Sci-Tech Venture Company Limited (SHA:600123) (Jincheng, China) and Nanjing Chemistry Industry Company Limited (Nanjing, China) have formed a joint venture company to begin construction of the grassroot methanol production facility next June. The company plans to build efficient housing and install self-supporting equipment in order to produce 1.8 million metric tons of methanol per year after the plant is complete and commissioned in mid-2013.

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