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BIZCHINA / Chemical

Chemical firm cultivates the Chinese market

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Updated: 2007-06-26 11:14

ANGUS Chemical Company, established in 1936 in the US and acquired by Dow
Chemical Company in 1999, is a leading producer of nitroalkanes and
derivatives, with more than 50 years of nitroalkane chemistry experience.
It has manufacturing facilities in the US and Germany.

In China, ANGUS focuses on six key markets: paintings and coatings,
personal care and cosmetics, leather, metalworking fluids, life sciences
facilities and rubber.

Dow Biocides, a business unit of Dow Chemical Company, helps customers
solve microbial challenges during the manufacturing process. Though ANGUS
and Dow Biocides are two separate businesses, they are connected where
their customers want them to be for efficiency.

In China, the two businesses have sales teams in Beijing, Shanghai,
Guangzhou and Taipei. They set up a customer application center in
Shanghai in 2006 and will open another in Guangzhou next year. They have
promised to invest $2.5 million every year into the two centers to
enhance facility and personnel build-up.

To better tap and serve the Chinese market, ANGUS and Dow Biocides
launched the "In China, for China" strategy in 2004. Mark Henning,
president and CEO of ANGUS and general manager of Dow Biocides, talked
about the strategy and how its efforts are paying off in China.

Q: Why did you launch the "In China, for China" strategy? Could you
please explain the strategy?

A: We want to be more involved in China's economic development, not only
for acquiring market share. I still remember very vividly that lots of
people rushed to China for low-cost manufacturing products several years
ago.

I was also in the line then. I met many purchasers on the plane every
time I was flying to China. But I gradually found out that what's really
valuable in China is not the low-cost products here, but China itself.

We eventually visited some enterprises in the chemical industry and our
customers, and realized that we should come to China not for low-cost
products but for developing the market itself. As a result, we formulated
the "In China, for China" strategy.

We are committed to ensuring our customers have better access to superior
products, technology and application specialists. It is important to have
local expertise and understanding of issues and trends impacting the
local market.

We have made significant progress in increasing capabilities - from
quality local sourcing of products to building local customer application
technology centers, investing around $2.5 million annually on people and
technology.

Our local manufacturing, technology and application support and local
sourcing investments position our businesses for long-term growth in
China.

Q: What's your perspective on the chemical industry in China?

A: We had predicted that China would become the second-largest producer
of chemical products after the US by 2015.

Our prediction is relatively conservative because we made the forecast
just from the perspective of industrial development. Calculated according
to population size, the market would be much larger. China's population
is four to five times that of the US.

Q: What's the biocides market like in the United States compared with
China?

A: In terms of size, the Chinese market is smaller, about 5 percent of
the US market. But with China's rapid economic development, the market
will expand much faster.

Both the global biocides and the specialty chemicals industries are
growing at around 6 percent, while China is experiencing growth rates in
these key areas of between 12 and 15 percent annually.

With living standards improving, Chinese people are buying new consumer
products like houses and cars. Once consumption picks up, the market for
biocides will expand even faster.

Our products and technologies can help improve the quality of life for
Chinese people in areas of health with disinfectants for people and
animals, to making paints more durable and better textiles.

Q: Does it mean that more training is needed to foster the market?

A: Yes. We need to enhance consumer awareness and create demand. But we
don't expect quick results.

Q: How would you rate your company's achievements in China?

A: We have realized our target here in the past years. We had set a
higher-than-average growth rate as target and we achieved it.

Q: Some say developed countries transfer high-pollution manufacturing to
China. Do you agree?

A: Dow doesn't do it. We adopt the most advanced environment standards
and maintain the same in all countries. We have advanced technologies and
don't need to cut corners to make profit.

(For more biz stories, please visit Industry Updates)

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