GERMAN chemical maker Lanxess AG plans to double annual production capacity of engineering plastics in China to more than 40,000 tons by the end of the year to meet rising demand.

The company will start operations of a second production line at its existing site in Wuxi, Jiangsu Province, in the fourth quarter of this year, Wang Yongli, president of Lanxess China, said yesterday. Another new small-scale manufacturing line exclusively for specialties and customer samples will start up in Wuxi around the third quarter.

Wang, speaking at Chinaplas 2007 in Guangzhou, Guangdong Province, where more than 1,000 domestic and global exhibitors are taking part, said since last year the company has pumped in a total investment of around 20 million euros (US$26.9 million) into the engineering plastics business in the Wuxi facility, near Shanghai. The show ends tomorrow.

Global giants are investing in China to tap the huge growth in demand for engineering plastics, used in automotive production as well as the electrical and electronics industries.

Wang said the market for engineering plastics is now growing at eight percent in Asia and more than 10 percent in China.

Last week, another German firm, BASF AG, opened a new engineering plastics compounding plant with a 45,000-ton annual capacity in Shanghai. BASF said the Asia-Pacific market for engineering plastics could grow on average by around seven percent a year during the next decade.