Dow Chem eager to boost China spending http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2006-06-08T114907Z_01_PEK273857_RTRUKOC_0_US-CHEMICALS-CHINA-DOW.xml&WTmodLoc=NewsArt-L3-Reuters+RecommendsNews-2
Thu Jun 8, 2006
By Kirby Chien
NINGBO, China (Reuters) - Dow Chemical Co. (DOW.N: Quote, Profile, Research) said on Thursday it was eager to boost investment in China but would not confirm another company's statement that it might become a partner in a project in Guangdong.
"We are looking at acquisitions. We are looking at wholly owned and looking at joint ventures," James McIlvenny, the president of Dow Chemical Asia Pacific, told Reuters in an interview.
"There is no question we are looking at increasing our investment in China," he added, without commenting on any specific project.
The chief executive of Kuwait Petroleum Corp. said recently that Dow and either British Petroleum (BP.L: Quote, Profile, Research) or Shell (RDSa.L: Quote, Profile, Research) might be partners in a joint-venture refinery and petrochemical project in Guangdong in southern China, which Kuwait is considering helping to build with PetroChina (0857.HK: Quote, Profile, Research) (PTR.N: Quote, Profile, Research).
As early as 2004, the largest U.S. chemical company had said it was looking to invest $3 billion to build a plant in China capable of producing more than 1 million tonnes of ethylene annually.
"When you make billion-dollar investments, you don't reverse course on them quickly. They are on the ground and operating for 30, 40, 50 years, so we are very careful," McIlvenny said on the sidelines of a development conference.
"The major assets that we would invest in are more likely to be in a joint venture mode. China still has a regulation that an ethylene cracker above 600,000 tonnes needs to be done with a joint venture partner," he added. Dow, which makes products used in everything from paints and cleaning products to cars and electronics, has so far invested $500 million in 10 manufacturing sites in China and will invest a further $200 million to construct a new glycol ethers facility.
The company already operates three plants built in 2002 producing latex, polystyrene and epoxy.
"Those plants have given us great confidence that we can invest and build manufacturing assets in this country and run them at world-class capability," McIlvenny said.
Dow also plans an information technology and research center in Shanghai, on which construction is about to start.
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