Montell Polyolefins, based in Hoofddorp, the Netherlands, has formed an alliance with Taiwan Polypropylene Co. Ltd. to build and operate a PP compounding plant in Hong Kong to serve the booming market in China.
The companies have begun a feasibility study on building a 13.2 million-pound-per-year plant, which is scheduled to begin operating by June 1998, according to Zhao Siu-hua, finance manager for Taipei-based Taiwan Polypropylene.
The plant will be built on land Montell owns.
``The goal of the alliance is to develop the PP market in China,'' Zhao said. ``We are targeting the markets along China's coast, from Guangzhou to Shanghai,'' she said.
The partners have yet to work out ownership of the joint venture.
If the project gets off the ground, Taiwan Polypropylene will be the first Taiwanese company to sell petrochemical products into China from Hong Kong, according to industry sources.
Taiwan Polypropylene and its closest rival, Yung Chia Chemical Industries Corp. of Taipei, produce the bulk of Taiwan's total PP output, which industry sources estimated at about 992 million pounds last year.
China regards Taiwan as a renegade province, and most trade between the two countries takes place through intermediaries such as Hong Kong. As such, Taiwan Polypropylene's alliance with a major multinational company like Montell serves as a buffer. Montell is the world's largest PP supplier.
Last year, Montell boosted PP production at its plants in Taiwan and Thailand.
Demand for PP in the Far East is projected to grow by 20 percent each year until the turn of the century, according to industry estimates.