Ici Chemicals To Spend $500m In Asia Over 5 Years

Imperial Chemicals Industries Plc (ICI) yesterday said it plans to invest US$500 million in its polyurethane business in Asia over the next five years to meet growing demand for the plastic.

Every ICI business considers Asia is of prime importance, regional director of ICI Polyurethane Asia Pacific Chew Eng Soo told Reuters in an interview at the launch of ICIs first evironmental report on the most versatile group of plastics.

Among its many uses, the plastic is used in a hard form in construction boards for house insulation, in a soft form as foam in furniture or car seating, or in a middle form in shoe soles.

 

Chew said ICI planned to spend $400 million on its first world-scale plant in Shanghai, China, which will produce 100,000 tonnes per year of MDI (diisocyanato-dipheyl methane), a basic chemical used in the manufacture of polyurethanes.

It will be a joint-venture between ICI, Nippon Polyurethane and Shanghai Tianyuan Chemical Works, which signed a letter of intent last year to build the plant.

A project of this size needs approval right up to the State Council, Chew said of Chinas equivalent of a cabinet. Nonetheless, in so far as planning goes, we are on track.

It is moving along quite nicely, and we are quietly confident that approval by the State Planning Council will be given shortly, he said of a plant due to be commissioned in 2001.

ICI also plans to build system houses, which provide technical support and blending facilities, in India by early 1998, Indonesia in the second half of 1998 and the Phillipines by 1999, as well as upgrading existing facilities in Thailand.

Chew said the demand for the plastic was best measured by the sales of MDI in the Asia-Pacific region, which have grown at around 13 percent a year over the last decade and are forecast to continue at over 15 percent to the end of the century.

As the living standards of people in the Asia-Pacific increase, so do the growth rates of MDI consumption, currently twice that of Europe and America and set to remain so for the forseeable future, Chew said.

He said the region used 400,000 tonnes of MDI a year with Japan, one of the most mature but slowest growing markets at four percent per year, consuming the lions share of 150,000 tonnes.

South Korea and China each were smaller consumers at 85,000 tonnes and 88,000 tonnes respectively, but growth was robust at around 10 percent each, Chew said.

Company officials told Reuters there were no plans for ICIs Polyurethane group to follow in the same floatation footsteps of the companys tioxide group.

Britains largest chemical company announced plans earlier this month to float its troubled tioxide operations on the stock exchange in the wake of lower profits last year.

Polyurethane is one of the bright stars within the ICI group, certainly one of the best components and you can see from predictions its going to stay that way for a good time to come, spokesman Richard Northcote told Reuters.