SHANGHAI (April 17, 3 p.m. ET) — Solvay Specialty Polymers and Rhodia Engineering Plastics announced progress on a 21 million euro ($27 million) compounding facility in Changshu, Jiangsu province, at a media event on April 17.
The plant will come on-stream this summer, months ahead of schedule. The announcement was made a news conference preceding the Chinaplas 2012 trade show in Shanghai.
In 2011, Solvay acquired Rhodia for $4.8 billion, creating one of the 10 largest chemical companies in the world. Solvay and Rhodia currently have around 3,000 employees in China and operate 15 sites in the country.
Some 26 percent of the companies' overall business is conducted in Asia, and they are working hard on expanding their footprint. Following the acquisition, Solvay and Rhodia have embarked on a series investments in China, including the compounding facility.
In addition, Solvay is building a 120 million euro ($157 million) production plant for fluorinated polymers at the company's industrial site, also in Changshu. This is expected to come on stream in early 2014.
“We are not coming to China for the cheap labor,” said Maurizio Gastaldi, head of Asia Growth and Development at Solvay Specialty Polymers. “We are coming to China to bring the best products for the market in China.”
The facilities in China will not serve the local market alone — the facilities will work to serve the global market.
The two companies also plan to combine their two Shanghai research and development campuses. The Solvay Specialty Polymers and Rhodia Engineering Plastics research and engineering facilities will be combined into one center at Rhodia's campus in the Xinzhuang Industrial Zone in Shanghai. A 4 million euro ($5.2 million) building will be added to the existing Rhodia research center with two floors dedicated to polymer formulation and processing, including an injecting molding facility for customer trials.
“Our R&D started in Europe, and then moved to America and now it's moving to Asia,” Gastaldi said.
The new compounding plant will serve China's electronics, automotive, consumer and industrial applications market. The facility will also be fully adaptable for future expansion both for overall capacity and for the addition of other high performance engineering and fluorinated polymers.
“This development will go through investment in our existing sites and also to follow the go-west policy of China,” said Frank Laganier, Asia-Pacific Zone Director, of Rhodia Engineering Plastics. “We have been in China for a long-time, mostly in the Shanghai and Jiangsu area.”
Solvay and Rhodia are placing special emphasis on China's expanding photovoltaics market, as well as the country's automotive market. China has emphasized the development of electrical vehicles in the last few years. By 2015, the country aims to have 500,000 new-energy materials on the road. Solvay and Rhodia are promoting products that can reduce vehicle weight and improve battery lifecycles.
“We will less be reliant on conventional fuel,” Laganier said. “The good news is that Solvay Specialty Materials has the right materials to make those vehicles more efficient.”
As part of China's 12th five-year plan, China has increased its PV installation targets from 10 to 15GW by 2015 and up to 50GW by 2020. The R&D center has recently introduced a lab dedicated to developing fire-resistant applications that can serve the photovoltaic market.
Solvay Specialty Polymers offers a range of products, including Halar ECTFE for front-sheet films, which can ensure protection and light transmission. Halar ECTF and Soilef PVDF can also be used for back-sheet laminates, providing moisture barrier hydrolysis protection as well as weather-ability and UV stability. In addition, the company's halogen-free flame retardant materials can be used for PV cabling.
“Continuous opportunities for solar energy growth are not only in China but also in the wider Asian markets and even further afield in those countries which have adopted policies promoting renewables,” said Qiang Zhou, the PVDF/ECTFE business development manager for Greater China and South East Asia for Solvay Specialty Polymers. “This places China as one of the world's largest manufacturers of modules and components for the global photovoltaic industry.”