Chemical firms reshuffled
In a move to strengthen China’s chemical industry, the country’s State-owned Assets Supervision and Administration Commission (SASAC) transferred China Textile Industrial Engineering Institute (CTIEI) to the China National Petroleum Corp (CNPC) in late July. CNPC is the largest oil producer in China, but its oil processing and other chemical businesses are inferior to that of its major competitor, Sinopec.
Industry analysts say the absorption of CTIEI, a leading fine chemical designing and planning firm, will allow CNPC to rapidly expand its fine chemical businesses.
In April, SASAC shifted ownership of China National Chemical Supply & Sales Corp to another Chinese oil giant, China National Offshore Oil Corp, to strengthen the latter’s chemical fertilizer businesses.
SABIC allies with Sinopec
Saudi Basic Industries Corp (SABIC) and Sinopec, the Chinese oil and chemical conglomerate, have reportedly reached a deal enabling SABIC to invest US$1 billion in Sinopec’s ongoing chemical project in Tianjin.
Launched in June 2006, the Tianjin project boasts a 1-million-tonne ethylene production capacity.
SABIC recently reported a net profit of US$3.4 billion for the first half of 2007, up 45 per cent on the same period in 2006.
With a planned investment of US$3.1 billion, the Tianjin project will annually output 1.2 million tons of ethylene and process 12.5 million tons of oil after it is completed in 2009. But according to China Chemical Information the Chinese government has yet to approve the deal.
Green laws to clean Chinese pharma
The first rules on pollutant discharge that specifically target the Chinese pharmaceutical industry are expected to take effect on 1 January 2008. The new standards were set by the State Environmental Protection Administration and will allow a three-year phase-in period.
For example, the benchmark criterion for chemical oxygen demand (COD) - a general indicator of the density of organic pollutants in discharged water - will be halved from the current 300 milligrams per litre to 150 milligrams per litre.
Yu Guanwen, a senior consultant to the China Pharmaceutical Industry Association, believes that the new rule will significantly increase Chinese pharmaceuticals’ environmental protection costs and nibble away industry profits, which are already thin.