Actually, many products are so closely connected to daily life that people fail to realize that they are using them all the time.

Specialty chemicals are raw materials for a wide range of products including toothpaste, soft drinks, shoes, medical equipment, medicine, mobile phones, batteries, computers, furniture, houses, cars and airplanes.

China now ranks third in the world in terms of the output value of specialty chemicals, behind the European Union (EU) and North American Free Trade Agreement (NAFTA) bloc.

However, in terms of growth, China has significantly outpaced both the EU and NAFTA, according to a chemical industry expert.

The EU, NAFTA and Japan are losing their market shares of specialty chemicals worldwide. China's specialty chemicals now account for 4 to 5 per cent of global market share, he said.

China's large market for specialty chemicals, a result of its fast economic development and improvements in living standards, has become a hot area for foreign investment.

Eric Baden, director of the Chinese business section of Degussa, a multinational corporation specializing in chemical products, told China Daily in an exclusive interview that the company wants to be an active partner in China's growth through a Three Development Strategy: Development of people, development of technology and development of the market.

Baden predicted that the specialty chemicals industry would continue to grow strongly in China over the next three to five years. China's entry into the World Trade Organization will further accelerate the sector's growth.

The development of industries related to specialty chemicals, such as electronics, pharmaceuticals, crop protection and plastics, will create massive and sustainable demand for specialty chemicals, Baden said.

As Chinese consumers are spending more on high quality goods such as cosmetics, paints, household electronics, cars and furniture, the demand for chemical materials will increase.

Baden said these factors had given Degussa confidence in their successful expansion in China.

Degussa's business relations with China date back to 1933. The establishment of Degussa (China) Co Ltd in Beijing in 1988 was a milestone for the company, transforming it from a foreign firm that mainly exported to China to a joint venture partner that develops and manufactures products in China and exports them to Asia and other countries.

Since 1988, Degussa has set up 11 joint ventures in Beijing, Guangzhou, Nanning, Qingdao, Shanghai and Shenzhen. Their total assets exceed US$110 million.

The company's total sales approached US$250 million last year, about 20 per cent of which was generated by joint ventures in China.

"Degussa's production in China is as successful as its sales in the country," Baden said.

Its joint ventures in China supply products ranging from carbon black and amino acids to water treatment chemicals for the Chinese and export markets.

Amino acids used in the nutritional and pharmaceutical products of Nanning Only Time Rexim Pharmaceuticals also sell well on both domestic and foreign markets.

Degussa Chemicals (Shanghai) Co Ltd is one of only four plants in the world and the only one in Asia to produce highly specialized additives for polyurethane foams.

"We are proud that our product quality has been tested in China's landmark projects such as Jin Mao Tower in Shanghai and the Oriental Plaza in Beijing. The world's largest dam at the Three Gorges is also built using Degussa concrete additives," Baden said.

Apart from its sales and production, Degussa aims to research and develop specialty chemicals in China.

(China Daily December 20, 2002)