Epoxy Company Expands in China

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HONG KONG Dow Epoxy, a business unit of the Dow Chemical Company, plans to invest more than $200 million in manufacturing and R&D facilities in China over the next five years. Four facilities will be either constructed or expanded in a targeted local market investment. Dow Epoxy currently operates 10 manufacturing facilities, including its Zhangjiagang, Jiangsu Province, China location, and two others in the Asia-Pacific region; two principal R&D centers, and regional technical centers for R&D are also globally located.

The company chose to expand operations in China due in part to local, positive growth in core epoxy sectors. China's market for epoxy products is growing notably, said Patrick Ho, business vice president of Dow Epoxy, emphasizing in-market supply capabilities and fully-integrated operations as the company's China roadmap.

Dow will build a 100,000 metric tons per annum (MTPA) addition to its Zhangjiagang liquid epoxy resin (LER) facility. The plant, located in the Yangtze River International Chemical Park, will be Dow's first LER facility in China. The company will integrate Chinese operations set to begin in 2009 with its supply network in the Americas, Europe, and Japan.

A 150,000 MTPA epichlorohydrin (ECH) plant will open in the same time frame at a different, unnamed location. Proprietary glycerine-to-ECH processes will debut when operations begin. Glycerine, the primary feedstock for the technology, offers environmental advantages over less-renewable substances. ECH is considered an epoxy intermediate.

Resin additives for electronic laminates and coatings will represent a future market focus for the epoxy business, according to a company report. In response to R&D efforts in the material, an additional 34,000 MTPA of manufacturing capacity will be added to the company's converted epoxy resins (CER) Zhangjiagang plant by 2008. The facility, which currently supports 41,000 MTPA, began production in 2003.

This final construction project is expected to reinforce application development and technical support capabilities in China. The Global Application Development Center will corroborate with an existing R&D center in Shanghai for solutions in the electrical laminate and coating markets. This center is expected to be operational by Q'01 2007. Some product R&D will be performed there.

For more information on China in 2006, please see Taiwan Maneuvers in the Outsourcing Game, Enthone Acquires Chinese Electroplating Entities, and Shenzhen Office Services Offshore Customers.



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