The US$21 million plant, located in Taixing, is the largest monochloroacetic acid (MCA) manufacturer in China with an annual output of 25,000 tons. MCA is major chemical material used to produce agrochemical and other fine chemicals including plastics, adhesives and textiles.

The Taixing plant also makes Netherlands-based Akzo Nobel the largest MCA producer in the world, with a total output of 145,000 tons.

"This plant demonstrates our commitment to serving the growing Chinese market," said Dag Stromqvist, a management board member. "It enables us to efficiently respond to China's market demand, and strengthen our dominant position in the global MCA market."

China consumes some 90,000 tons of MCA a year, most of which is produced domestically. Analysts said the demand is expected to grow at 6 or 7 percent every year, making it the most dynamic market in the world.

With the establishment of the plant, Akzo also aims to occupy one fourth of China's market in three or five years, as compared with the current less than 1 percent, said Anders Brostrom, general manager of Akzo's functional chemicals Asia.

"We are ambitious because the industry is experiencing restructuring in China with the closing-down of small manufacturers that are economically inefficient and environmentally unqualified," said Brostrom.

Stromqvist said the new plant could be a global MCA supply centre that covers foreign markets, although most of its products will be sold locally.

"Not only will we serve domestic customers, but also global customers, we are currently expanding in this region," said Stromqvist.

The company said it is constructing a resin production facility in Suzhou, Jiangsu Province, scheduled to operate in 2004.

(China Daily June 14, 2002)