GUANGZHOU, CHINA — Forget about China's “new normal” and slowdown. Further acceleration is right ahead for Dow Packaging and Specialty Plastics, which has been delivering already robust growth that exceeds 1.5 times the country's GDP rate.
Driving that type of growth is China's booming appetite for sophisticated packaging and Dow Chemical Co.'s upcoming new capacity in the Middle East.
Three executives, including Global Business President Diego Donoso, Asia Pacific Commercial Vice President Mark Saurin, and Greater China Commercial Director Lawrence Cheung, explained the market dynamics and business strategies in an exclusive interview at Chinaplas.
“I actually hear more in China than anywhere else in Asia people wanting more sophisticated technology,” said Saurin, who shared some telling numbers that illustrate China's growth potential. “In some of the other parts of the Western world, 50 percent of one of our key polymers, [linear low density polyethylene], is a differentiated LLDPE, 50 percent is a commodity LLDPE. In China, that number is about 15 percent for differentiated and 85 percent for commodity.”
The plastic packaging market in China is going through rapid technological expansion and developments, fueling demand for higher performance solutions.
“So the demand is there, to move to a more sophisticated need, and we are ready to supply once our new facility comes on stream, I see tremendous growth ahead, above the rate of 1.5 times GDP,” Saurin said.
“That's exactly what our strategy is focusing on. It's exactly why we are supporting major investment in Saudi Arabia to bring new capacity,” he added.
Dow's joint venture project in Sadara, Saudi Arabia, will start churning out plastic resins by the end of the third quarter, “plus or minus,” said Donoso.
The $20 billion Sadara project between Dow (35 percent) and Saudi Arabian Oil Co. (65 percent) has been in the works since 2011 and is expected to bring substantial output to Asia Pacific.
“I visited Saudi Arabia two weeks ago to see the plant myself for the first time, it's almost 100 percent ready on the plastics side of the business,” Saurin said, “Please remember, Sadara is a huge complex with 26 manufacturing units, plastics and chemicals, and the plastics operations are the things that'll be first ready. Those are the ones that are ready to bring the product we need here in China.