SP CHEMICALS – PERFECTLY POSITIONED FOR PROSPERITY About 200 kilometers northwest of Shanghai in China’s Jiangsu province, there is an economic development zone dedicated to the production of fine chemicals. OME OF THE WORLD’S “Being the largest producer of the course of the current decade; Chan Hian Siang largest chemical companies chemical raw materials in the CFCITP and, while market conditions may SP Chemicals CEO Ssuch as AkzoNobel, SNF and means that we are best placed to be prove to be more competitive than Noviant have opted to set up a shop the principle supplier of caustic soda those experienced in recent years, its coal-fired power plants due to their there, in what is now a significant and chlorine to new and downstream companies such as SP Chemicals with proximity to Shanghai. Considerable sectoral hub officially known as the producers setting up production established track records look set to effort, in the meantime, is being put China Fine Chemical Industry Taixing facilities in the park,” explains enjoy continued growth. in to ensuring that the workforce is Park (CFCITP). It is also home to CEO Chan Hian Siang. “Most of our Chan’s company is also well up to scratch. “Our industry is not SP Chemicals, a company with its customers in the PRC are located positioned to benefit from the like, say, shoe manufacturing,” Chan headquarters and roots in Singapore. within a 300km radius from our improving trade relations between says, “and you need a certain level Founded in 1990 after its CEO Chan production plant, which gives us the China and Singapore and from China’s of technical skill. The Chinese are Hian Siang visited Shanghai as a member added advantage of low transportation One Belt, One Road initiative to very conscientious when it comes to of a delegation from the Singapore costs. It also makes it easier for us to establish faster intermodal land routes studying, however we still make sure Chinese Chamber of Commerce & guarantee supply.” between Asia and Europe. “We may that they receive a first class on-site Industry, the company has since grown Chan and his colleagues have also not be actively involved with such training.” into one of China’s largest producers of taken advantage of their plant’s initiatives because we are producing Chan and his colleagues have also Chlor-Alkali, an industrial process used to access to the ports on the East China raw materials,” Chan concedes, “but been exploring means of diversifying produce the caustic soda that is needed Sea to open up export markets in if the Chinese companies that are their activities up the petrochemical to make everything from rayon and “BEING THE LARGEST PRODUCER OF CHEMICAL RAW MATERIALS chain. While the company already cellophane to soap, pulp and paper. IN THE CFCITP MEANS THAT WE ARE BEST PLACED TO BE THE produces downstream products Last year, SP Chemicals turned over PRINCIPLE SUPPLIER OF CAUSTIC SODA AND CHLORINE TO NEW such as Vinyl Chloride Monomer and more than RMB 7bn (U.S.$1bn) with AND DOWNSTREAM PRODUCERS SETTING UP PRODUCTION Styrene Monomer, it is now looking at FACILITIES IN THE PARK.” a domestic sales footprint stretching the upstream opportunities that the across the three provinces of Jiangsu, the US, India, South-east Asia and producing the end products prosper, new availability of cheap propane and Zhejiang and Shangdong, and its clients Australia and they are also exploring then so will we.” ethane from the US may present. include both multinational corporations a listing of SP Chemicals on Shanghai It has also been taking steps to “To move into petrochemical and state-owned enterprises operating Stock Exchange in the near future. ensure that it can compete on the production we have traditionally in a number of industrial segments Even though demand for chemicals international market and three years needed access to ethylene,” Chan ranging from petrochemicals and on China’s domestic market has slowed ago commissioned DuPont USA explains, “but the market is mainly textiles to paper and pharmaceuticals. down from the double-digit growth chemical company to help it improve controlled by Japanese traders like Among these are household names that it enjoyed in the past decade, a its safety standards. Over the past Mitsui and Mitsubishi, because you such as BASF and Dow Chemicals, recent McKinsey report predicted that two years, it has in addition spent need extremely sophisticated tankers not to mention, of course, some of its China could still account for something RMB80m (U.S.12.5m) reducing that can transport it at its liquefaction neighbors in Taixing. around 60% of global demand over sulphur and nitrogen emissions from temperature minus 104°C. But now with shale gas revolution in the US there is a lot of cheaper ethane and propane feedstock coming onto the market, so upward integration remains one of our main goals.” In the meantime, SP Chemicals has been in talks with the Chinese authorities about the possibility of moving into olefins production. Either way, Chan is confident that within the next few years he and his colleagues will have succeeded in turning SP Chemicals into a vertically integrated company – and a thriving, public listed company offering a great rate of return to its investors. .