GERMAN chemical and energy group Evonik Industries AG said yesterday it plans to start construction on a 250-million-euro (US$347 million) specialty chemicals plant in Shanghai on Saturday.
The plant, which will make methyl methacrylate (MMA) and methacrylate specialties, was announced earlier by Degussa GmbH, the world's top specialty chemical maker.
Degussa assets have been transferred to RAG Beteiligungs AG, which on Wednesday changed its name to Evonik ahead of a stock market listing planned for the first half of next year.
The plant will have annual MMA capacity of around 100,000 tons, plus will make related specialty chemicals to supply customers in the opto-electronics, paint, adhesives and automotive industries.
MMA is used to make resins, plastics and materials.
"To those sites in Germany and North America, we now add a further highly integrated site here in China," Klaus Engel, a board member of Evonik and formerly the chairman of Degussa, told a press conference in Shanghai. "This investment puts us in a position to continue expanding our global leadership in the production of methacrylate."
The facility will be built on the firm's existing site at the Shanghai Chemical Industry Park, where it is operating a polyester plant and a colorants plant. The new facility will come on stream in mid-2009.
The National Development and Reform Commission approved the MMA project in April.
Chemical operations account for about 70 percent of the new Evonik group's business. It also has an energy division, representing about 20 percent of its total business, and a real estate arm, with 10 percent.
The energy division specializes in the production of electricity from coal and renewable energies. Responding to a question about whether Evonik will expand in China in this sector, Engel said: "We see, as a matter of fact, that markets outside Germany have great potential for this technology."
He did not elaborate.
Engel said the group's property business is mainly limited to Germany.
Evonik posted sales of 14.8 billion euros in fiscal 2006 and employed about 43,000 workers.