Wacker, one of the world's leading chemical companies, announced in China's business hub yesterday its aggressive domestic expansion plan involving an investment of 250 million euros (US$327 million) over the coming five years.

"China is a cornerstone in our strategy of expansion with the obvious reason that it will soon become the world's largest market for chemicals," said Peter Alexander Wacker, president and chief executive officer of Wacker's executive board.

The company started to deliver products to China through distributors in the 1970s, and last year achieved sales of around 100 million euros (US$131 million) in the country, a growth of 50 per cent year-on-year.

Local chemical sales last year accounted for 4 per cent of Wacker's global sales of 2.5 billion euros (US$3.25 billion).

"We are sure that by 2010 China will stand for 10 per cent of our global chemical business," said Wacker. "And we are working hard to achieve that goal."

He announced that the company, together with Dow Corning, a world leading silicon supplier, will invest around 1 billion euros (US$1.31 billion) in building a global-scale siloxane and fumed silica production complex in Zhangjiagang of Shanghai's neighboring Jiangsu Province.

It is believed the project will soon be granted government approval with construction expected to begin on the 66.6 hectare site as soon as possible, said Jean Lionel Gros, managing director of Wacker Chemicals Greater China, adding that the plant will begin operating in 2008.

Wacker did not reveal its specific share in the joint venture, but he said it ran into the high hundreds of millions of euros.

Currently the company is enlarging its technical center which was set up last year in Shanghai, recruiting more research and development engineers and increasing the number of labs from seven to 10, which is setting the company back around 2 million euros (US$2.62 million).

The company will also start building a spray drying facility for the production of redispersible powders for construction applications at Zhangjiang High-tech Park in Shanghai.

The facility will cost around 10 million euros (US$13.1 million) and "as China will remain one of the fastest growing markets in this field with a yearly growth of around 20 per cent, we are considering an expansion of our investment," said Wacker.

Wacker also announced that it has just acquired the polyvinyl acetate based solid reins business of Wuxi Xinda Fine Chemicals Co Ltd in Jiangsu Province.

The development speed of the Chinese market for polyvinyl acetate based products exceeds the average global growth rate by 3 per cent.

Source: China Daily