Why China?

The President of the Union des Industries Chimiques (UIC), Bernard Rivière, defines the assets of the French chemical industry as follows: low energy costs, well-trained personnel, process quality and productivity optimization. “Constant communication between clients and suppliers of chemical engineering equipment guarantees technical and economic adequacy between equipment and user needs”, explains Jean-Michel Bauer, President of the Groupement Interprofessionnel des Fournisseurs de l’Industrie Chimique (GIFIC). GIFIC encourages French equipment suppliers to advertise this know-how around the world. For this reason, GIFIC is teaming up with UBIFRANCE, the French Agency for International Business Development, to organize a group participation of French companies at the next ACHEMASIA 2004 (11 - 15 May 2003, Beijing, China).

According to Jean-Michel Bauer, three development areas make the Chinese market particularly interesting for French chemical engineering companies. First, China has significant agricultural needs, which call for base chemical products (fertilizers and nitrogenized products) as well as specialty chemicals, especially agrochemical products (pesticides, fungicides). Second, China needs pharmaceuticals (drug development). Third, China needs products and services dedicated to environmental protection (gaseous treatment of incineration fumes, COV, etc.).
Bauer also sees China as a land of opportunity for component producers: “French equipment suppliers are highly implicated in chemical processes which allows them to propose global solutions that meet functional conditions, an asset for penetrating the Chinese market.”

Jean-Pierre Dal-Pont, General Delegate of the Société Française du Génie des Procédés (SFGP) notes that “China is one of the rare countries in the world with a high growth rate and enormous market potential. Politically stable for over 20 years, China is definitely looking towards future progress.” Dal-Pont, who established several specialty chemicals plants in China, adds that China also needs training in the latest techniques for management, quality, security and environmental protection. In his view, French companies have an important role to play in this regard: “French and Chinese people have similar characteristics – respect for culture, education and a long-standing friendship.”

Bernard Rivière highlights the strong growth of the Chinese chemical industry. China recently surpassed the French chemical industry as 4th worldwide chemical manufacturer, after the United States, Japan and Germany. According to Rivière, China is poised to quickly become the 2nd chemical manufacturer worldwide after the U.S.

A growing French presence in China

Since its entry in the WTO, China offers unprecedented economic opportunities and the number of French companies established in China has significantly increased. With 500 companies, France is the 3rd European investor in China, behind the UK and Germany. All the major French chemical companies are present in China: Air Liquide (18 locations), Atofina (20), Aventis, Rhodia (20), Sanofi-Synthélabo, Total (8).
Atofina, Total’s chemical division, has been present in China for over 30 years. It has 14 production sites throughout the country. In 2002, Atofina opened a technical center in Beijing followed up with two others in 2003 (Shanghai and Guangzhou). In February 2003, Atofina acquired a polystyrene plant from the China Offshore Oil Sanshui Chemical Industry, located in Sangshui, Guangdong province.
Rhodia, a world leader in specialty chemicals, has been in China since the mid-70’s as the chemical division of the former Rhône-Poulenc group. It now has 20 locations with 3500 employees and total sales of 298 million US-Dollar.
Sanofi-Synthélabo is one of the world’s top 20 pharmaceutical groups. Seventh largest in Europe, Sanofi-Synthélabo is the 2nd largest pharmaceutical company in France. With 39 million
Euro total sales in China at the end of 2002, the group is now well established.
Some French small and medium-sized companies (SME) are also established in China. Ethypharm, for example, was the first French pharmaceutical company to create a joint venture in China (1995). Given the technological cooperation agreement signed in June 2003 between Anvar and their Chinese counterpart Innofund to exchange expertise between French and Chinese SME, an increase of French SME is likely to occur in the near future.

A brief compilation of current projects

In July 2003, Technip-Coflexip and Sinopec signed a strategic partnership for engineering, equipment supply and project construction in the oil, gas, petrochemical and chemical sectors. The agreement covers the Middle-East, India, Africa, Asia Pacific and China. The combined expertise of Technip-Coflexip and Sinopec will reinforce their competitiveness and develop their activity in China and other world regions.
Shanghai Chemical Industry Park Industrial Gases Company (SCIPIG), a joint venture between Air Liquide and Praxair (two global leading suppliers of industrial gases) signed major supply contracts with BASF Chemical Co. and Shanghai SECCO Petrochemical Co. Ltd in May 2003. SCIPIG will supply hydrogen to BASF for the largest production site of tetrahydrofuran(THF)/polytetrahydrofuran(PolyTHF) and nitrogen to SECCO’s 900.000 tons per year ethylene cracker and downstream