China's Guangdong province hopes to seal its reputation as China's plastics center with the opening of the Guangdong Plastics Exchange - the largest facility dedicated to plastics in China.
The 20 billion yuan ($24.6 million), 2 million-square-foot warehouse can store 300,000 tons of resin for manufacturers and trading companies.
The facility features some services designed for local and international customers: financial guarantees on raw materials contracts and an Internet-based ordering platform. The provider of those services is Guangdong Plastics Exchange Co. Ltd., a subsidiary of Guangdong Hongda Industrial Group, one of the province's largest plastic materials manufacturers and traders.
``Initially, we will focus on PVC, and expand to other plastics as the market develops,'' said exchange representative Jin Jian in a telephone interview.
Located in Guangzhou, the exchange hoped to draw plastics and chemicals producers and traders from surrounding manufacturing cities in the Pearl River Delta to its opening ceremony Sept. 26. GDPE sponsored a Global PVC Summit that day, the first of what it plans to be an annual event.
The exchange can support as many as 700 clients and expects a combination of trading companies and raw materials suppliers to join. Jin said membership in the exchange is open to international and domestic companies and individuals. To date, two Japanese companies have expressed interest in joining.
Jin said GDPE's Internet-based inventory and trading system may be the biggest attraction for producers and trading companies.
China's building boom during the past five years has seen PVC consumption grow to an estimated 10 million tons in 2005, according to a Sept. 1 report in the Guangzhou Daily newspaper. The country imports a large amount of PVC raw materials. The report estimated that domestic production in 2005 will reach 9 million tons.
One of the objectives behind establishing the GDPE is to promote more regularity in the market in China. GDPE will offer financial guarantees on contracts from one to six months in advance, and allow traders to pay contracts in installments.
