Scheduled for 3 -5 September in Shanghai, UTECH Asia 2008, will incorporate PU China 2008 for the second time, making this once again the most important meeting place for PU professionals from China and the Pan-Pacific region including India.
UTECH Asia / PU China is a prime forum to personally meet those often hard-to-reach decision-makers within the Chinese major manufacturing industries including the automotive industry, general engineering, aerospace, furnishing & bedding, building & construction, electrical/electrotechnical, footwear, textile, mining and offshore; and companies developing domestic and medical/surgical applications.
China will be the biggest PU market by 2010
China is set to become the biggest single polyurethanes market in the world by 2010, consuming 4.4 million tonnes of material, compared with North American use of 4.1 million tonnes by that date. Even so, as result of China's huge population of well over 1.3 billion, per capita use of polyurethanes in China in three years time will still be low compared to that in developed countries. This means that there remains considerable scope for growth in China's polyurethanes sector, to meet the appetite of China's population for consumer goods.
Demand for polyurethanes is growing at high double-digit rates, and is the reason so many raw materials suppliers, producers of processing equipment, and manufacturers of ancillary chemicals have already set up in China. But they plan to invest more, especially in isocyanate plants in China, based on the strong growth which all pundits predict will continue.
A few more statistics on the growth of the Chinese economy indicate why the producers see this investment in PU raw materials is vital to their future growth. For example, China currently makes about two thirds of the world's footwear, while its flexible slabstock foam production in 2006 reached 640 kilotonnes. This figure will reach 930 ktpa by 2010, market research says. Domestic manufacturers of flexible foam report growth rates of 20 percent a year. Mattress manufacture in China is now at over 4.5 million units, with nearly 600 000 units exported. Some 3 million mattresses were made by just five huge companies. Not surprisingly China also has the biggest bedding manufacturing plant in the world, a one-million ft2 (93 000 m2) plant opened in 2006. And while some observers feel that the high growth of recent years - 14-15 percent annually in the Chinese PU market - may slow to around 10 percent or less towards 2010, partly as a result of limited TDI availability, these growth rates are still higher than seen anywhere else in the world.
All of this means that the Chinese polyurethanes business is one no supplier can afford to ignore, since the country's relentless domestic growth shows no signs of stopping. The country has seen average annual economic growth of ten percent a year for 25 years. China also now makes nearly 8 million cars and light trucks a year, and this figure is rising. A booming construction business means China sucks in raw materials for buildings. For example, demand for insulation in China is growing at just under 9 percent a year to 2011, a recent study showed.
China's growth is driven by huge domestic demand from its population of over 1.3 billion, whose buying power is consistently rising. And the country is also increasingly exporting PU products, including foam, foam products and furniture, to the US and Europe. China's benefits for producers include low labour costs, cheaper raw materials and often massive economies of scale.
One polyurethane industry expert in China sees the Chinese market as being extremely open, with 60 percent of exports controlled by foreign firms, and a labour market which is also extremely open. And while perhaps only 300 million, or under a quarter, of China's population have a standard of living close to that of western countries, this means that the potential GDP growth, along with a resulting increase in personal spending power to buy consumer goods such as cars and refrigerators, remains staggering.
Observers also point out that business costs have been lower in China, since companies do not have to pay social costs, supply pensions or health benefits and do not have the legacy issues that affect corporations in the western world.
To meet the demand for raw materials for this booming market, BASF, Huntsman and Chinese partners have invested in a 240 ktpa MDI plant in Caojing. BASF started up a 160 ktpa TDI unit there as well, while Bayer MaterialScience is building a 350 ktpa MDI facility, set to start up in 2008, as well as a 300 ktpa TDI plant using its new gas-phase phosgenation process. Chinese MDI producer Yantai Wanhua Polyurethane is assessing options for adding 40 ktpa at its Ningbo plant to bring capacity there to 200 ktpa. The group's original Yantai plant has 120 ktpa MDI capacity. The company is also considering options for adding another MDI plant, while BASF and Huntsman have said they may build a 400 ktpa MDI unit in China together, or put up separate units, depending on the outcome of current discussions. And many suppliers of ancillary materials, surfactants, antidegradants, catalysts and manufacturers of equipment for the polyurethanes sector, have also set up operations in China.
