DuPont seeks to build plant in China

By RICHARD SINE / The News Journal

03/02/2005

DuPont has begun negotiations with a city in China to build a major titanium dioxide plant there, the company announced Tuesday.

The plant would cost roughly $200 million and employ up to 400 Chinese, said Glenn Kmecz, venture manager for the plant. Those numbers may change depending on negotiations, he said.

The plant would be in Dongying, a city of 1.6 million in the province of Shandong on China's eastern coast. The plant would be the first U.S. investment in the city, Kmecz said.

DuPont officials like the site because it is near China's second-largest oil and natural gas field, Shengli field. Natural gas would power the plant.

DuPont is asking for the city's help in building the infrastructure for the plant, Kmecz said. For example, the city may hook up electricity or water lines, or build roads or rail lines that would be used to deliver the product off-site.

Titanium dioxide is a white pigment used in paper, paints, plastics, textiles, ceramics, cosmetics and other items. DuPont, the world's largest manufacturer of titanium dioxide, operates five plants producing the product - three in the United States, one in Mexico and one in Taiwan.

The company sold about $2 billion of titanium dioxide last year, about 7 percent of its total revenues.

DuPont has been looking to expand in Asia Pacific so it can sell its products to the region's booming industrial base.

Current and forecast demand for titanium dioxide is higher in Asian markets than anywhere else in the world, said Sam Severance, vice president of DuPont Titanium Technologies. China's building boom, in particular, is expected to increase demand for white paint and plastics, Kmecz said. For example, the PVC plastic used in window frames contains titanium dioxide.

"There's a growing market, and whoever gets there first will be able to capture that market," Kmecz said.

DuPont's plant would employ a newer and more environmentally friendly process than those currently used in China, the company said. Most Chinese plants produce titanium dioxide by reacting an ore with sulfuric acid, a toxic chemical. DuPont would use a proprietary chloride-based technology that creates less waste, Kmecz said.

Waste from DuPont's Edge Moor pigment plant was found to contain small concentrations of dioxin, one of the most toxic substances known. Kmecz said DuPont would strive to minimize production of dioxin in the new plant and dispose of it in secure landfills.

The plant would take several years to design and construct, Kmecz said. When completed, it likely would supply industrial customers throughout Asia.

Contact Richard Sine at 324-2878