Rhodia Polyamide Engineering Plastics, one of Paris-based chemical giant Rhodia SA's six enterprises, plans to increase the capacity of its Shanghai compounding plant by 40 percent to stay ahead of competition in Asia.
A capacity boost will help support rapid growth in the currently undersupplied market, particularly in automotive, home and personal-care sectors, said Frank Laganier, Rhodia Polyamide's Asia- Pacific zone director.
Rhodia has not released a start date for the expansion project, but the added capacity will be in place by 2011, Laganier said during an interview in Shanghai.
Rhodia has boosted its Asian market in recent years. About 40 percent of its global engineering plastics sales come from Asia.
China alone represents half of Asia's nylon 6/6 market, which is the second largest in the world, behind the Americas. Rhodia estimates that Asia will become the largest nylon 6/6 market by 2015 and China's share in that region will continue to grow.
It's a no-brainer to keep investing in China, Laganier said.
Engineering plastics demand in China is growing even faster than the overall plastics resin market, he said. Rhodia Polyamide first entered China in 1995, established a compounding plant in Shanghai in 2006 and added a research and development center in the city in 2008. The center houses a third of Rhodia's engineering plastics R&D staff in Asia.
Rhodia Polyamide is focused on product innovation and sustainable development for high-potential markets like China. About a quarter of the unit's R&D manpower and a fifth of new patents produced last year are in fast-growing economies. Also, the percentage of its new-product sales in Asia has risen steadily, from 15 percent in 2002, to 27 percent in 2006 and 35 percent in 2009.
Midyear, Rhodia made a global launch of its latest products and debuted them at Chinaplas, including castor-oil-based PA6/10 Technyl eXten, Fuel'In by Technyl nylon for fuel tanks and fill pipes and Neoline by Technyl for auto parts.
Plant-based eXten offers high performance: a high melting point of 419° F, exceptional chemical resistance compared with nylon 12, high gas barrier properties and low moisture absorption.
Fuel'In touts a 40 percent weight reduction and low permeation for auto fuel tanks. Based on mineral-filled nylon 6/6 monomaterial, Neoline is designed to address vertical body panel and exterior parts needs in on- or in-line painting.
The booming auto industry is the fastest-growing end market for the unit in China, representing about half of its sales. In 2009, Rhodia's auto market grew 20 percent, despite a contraction in China's export-dependent electrical/ electronics market. In automotive, Rhodia works closely with both global key accounts as well as Chinese domestic original equipment manufacturers.
We've been supporting Chinese automakers to grow since day one, said Asia marketing director Albert Huang. Rhodia developed the first plastic intake manifold in China for Wuhu-based Chery Automobile.
Rhodia Polyamide's other Asian plant is in Onsan, South Korea. Though the unit's China market is 10 times larger than its Indian market, Laganier said nylon intermediate sales in India are growing fast and its auto production is catching up with South Korea.
Polyamides made up 37 percent of Rhodia SA's 2009 sales of $5.6 billion.
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