Update 28 May 1998
PU China '98 Conference,
Success in Shanghai
Shanghai,
People's Republic of China,
April 1-3, 1998
The PU China '98 meeting attracted over 3000 polyurethane specialists - primarily from within China - all keen to hear about the latest possibilities of polyurethane technology. The organisers - Crain Communications Ltd, London, and Industrial Promotions International BV, the Netherlands - say the success came partly because the Shanghai venue is closer to much of the country's most highly developed industries, but also from momentum building on the successful 1995 event in Beijing.The following report is reproduced from Urethanes Technology, April/May 1998.
'China is now,' says ICI's Thomas, while emphasising growth prospects
By David Reed, UT Editor
"China is now - not just the future - for polyurethanes," said Patrick Thomas, chief executive officer of ICI Polyurethanes, speaking in his keynote presentation opening the three-day PU China '98 conference, April 1.
And, Thomas asserted, ICI remains firmly committed to the country, even though his firm's long-discussed plans for major investment in the manufacture of MDI (methylene diphenyl diisocyanate) have run into a snag.
In particular, ICI's involvement in the Chinese polyurethanes sector continues to be a high priority - and for good, long-term reasons.
"China will soon become the largest polyurethane market in Asia-Pacific," Thomas said in his keynote presentation to an audience approaching 300, including many local and international specialists. "The polyurethanes industry is growing by a staggering 9 percent a year in China - and this is higher than global average growth," the ICI chief emphasised.
China has already seen massive growth, Thomas continued, with demand in 1997 being more than 500 000 tonnes, a five-fold increase since the 1980s. Although part of this growth is due to strong growth in the manufacture and export of low-cost products, much of it is spurred by the ongoing industrialisation of China which, itself, has attracted massive investment from multinational companies, the ICI executive explained.
Particularly high demand is forecast for appliance, furniture and bedding, and automotive applications, he said.
Similarly upbeat comments were made by other speakers in the plenary session of the first day of the PU China meeting, with the main critical note coming from one of the country's leading PU specialists.
Raw material supply is the key and, "based on our forecast of the Asian supply and demand of MDI, TDI (toluene diisocyanate) and polyols, imports from the American and European regions will be required to meet demand throughout [the next 15 years]" said Edward McKenna director, marketing, polyurethanes-Asia Pacific of BASF East Asia Regional Headquarters Ltd in Hong Kong, in his presentation to the major international conference, titled 'Future raw material supply in China.'
China's average annual economic growth is forecast to be 7 percent over the next 15 years, he said, pointing out that this means "demand for consumer durable and household goods is expected to keep the China demand for PU chemicals above the GDP growth estimates." At present, local raw material supply amounts to only a fraction of that required - and, McKenna pointed out, many of the plants do not run at even their nameplate capacities. Polyol capacity, for example, was about 260 kt in 1996, but reports indicate that only 132 kt was actually made in that year. Similarly, TDI capacity is 50 kt - about a third of that used by the PU industry in China - but "production rates are a maximum of 50 percent of nameplate capacity," the BASF chief said.
And the situation regarding MDI is worse. Chinese plants could make 20 kt a year, a mere 20 percent of that required and, again, the plants are running far below capacity for much of the time.
But the prospects for raw material supply are improving, McKenna continued, despite the scale-back implicit in the ICI-BASF combination which takes 40 kt off the total capacities of the two plants originally planned.
BASF has increased the scale of its planned TDI unit to 130 kt, from 100 kt, he said. And, McKenna added, there are plans "by Shell and others," to build propylene oxide/polyol plants in China "with capacities in excess of 200 kt a year."
All of these new capacities will be more efficient, he pointed out and, while the body of his paper concluded that there would be no problems with the supply of the required precursor materials, such as benzene and toluene, he cautioned that "due to the magnitude of these plants and the infrastructure necessary to support them, they may be subject to delays."
Wu Chisheng, president of MinMetals Composites Group Inc., also pointed out that plant utilisation was often far below design capacity. Citing the Sichuan Changfeng Chemical factory's MDI plant as an example, she said its typical output was just 400 tonnes a year, only 10 percent of design capacity. "Such a low service capacity is hard to believe at all," she said.In her presentation in the Plenary session of the PU China '98 Conference, she reviewed the recent history of the business and highlighted the steps needed to propel the industry forwards.
The recent past, since the country instituted its 'open and reform' policies, has been particularly interesting, Wu said, with the total output of raw materials for making polyurethanes showing average annual growth in excess of 16 percent, rising to over 153 kt in 1996 from just 97 kt in 1993. Total output of products has shown an even higher growth rate, above 18 percent a year in the same period, reaching nearly 445 kt in 1996, up from the 1993 total of 270 kt, data in Wu's conference presentation indicate.
"The performance of polyurethanes has been contributing to the rapid growth of the Chinese economy as well as living standards," according to Andrew Tong of Bayer China Co. Ltd, Hong Kong.
He cited the relatively low consumption of polyurethane per capita in the Far East as showing great potential for growth in the future. "In the past 10 years, the flexible foam industry has experienced dramatic change, Tong said, pointing out that it had moved from simple box foaming to continuous foaming in over 100 production lines, with corresponding increases in output and quality. By the turn of the century production is likely to be about 400 000 tonnes, he estimated.
But he placed greatest emphasis on the potential for growth in the use of polyurethanes in two key sectors: rigid foam insulation and automobile production.
The overall message from speakers at the PU China '98 conference underlined the theme of the conference: 'Building partnerships for growth.' Through contacts with world-class companies, China has the potential to develop rapidly into a high volume, high quality market for polyurethane-based products.
Copies of the complete Book of Papers are now available, price £85, from Crain Communications Ltd, New Garden House, 78 Hatton Garden, London EC1N 8JQ, UK. Telephone +44 (0)171 457 1400, fax +44 (0)171 457 1440. You can also email Louise Davies with your order or queries.
A further PU China event is being planned for 2000. This will probably also be in Shanghai, depending on feedback from the participants in the 1998 event.China remains of great interest, however, and we offer continuing marketing opportunities through the Chinese language edition of Urethanes Technology, which is published twice a year in April and October.
If you wish to receive details of this or the PU China 2000 conference & exhibition, or to submit an outline for a paper, please e-mail our conference department, or write to
PU China 2000
Crain Communications Ltd
New Garden House
78 Hatton Garden
London
EC1N 8JQ
UKTel: +44 (0)171 457 1400
Fax: +44 (0)171 457 1440For related events, see our events diary
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