Tianjin’s New BinHai Plan for Chemical Industry

Friday, June 15, 2007 2:40

Are you a chemical company looking to enter China? If so, this post is for you.

While recently working on behalf of a light chemical company to identify their China site, we visited Tianjin to see what opportunities exist within their parks, to understand the macroeconomic developments, and catch up with old friends (to get the real story)..

With one of China’s longest histories in industry (Tianjin, Qingdao, and Shanghai have long histories of foreign investment), Tianjin has a number of advantages that make it an attractive place to invest. a large pool of skilled labor, a long history of working with foreign companies, a concentration of investment zones, the largest port in northern China, and so on.

Like Xi’an, Wuhan, and Chongqing, Tianjin is one of China’s strongest second tier cities, and being within an hour and a half of Beijing (soon to be 27 minutes by bullet train), it is becoming more and more attractive to firms who are looking to move out of Beijing for lower costs of production.

During our initial preparations for the trip, we began speaking with all of the parks to get the latest on their parks to see what plots were available, what policies were coming down (especially related to environmental conditions), and see what interest they would have in our client… and in the end, we chose to visit three parks (one on our own, and 2 with the assistance of a member of Tianjin’s foreign investment department)… and here are a few notes that we thought you the readers would find interesting:

TEDA: The Tianjin Economic development zone is actually 5 separate zones, and like SIP (Suzhou Investment Park), is the primary zone for Tianjin and is well established in the foreign community (Motorola invested roughly 1.2 billion in a handset factory there). The “Motherzone” is about 45 minutes outside of downtown, the west zone is 45 minutes to the southwest from there, and the chemical park (CIP) is 45 minutes from the mother zone near the port.

CIP is nearly full, and during the recent New Binhai planning CIP officials decided to turn away further chemical company investment once the north zone is full… The name will be changed from CIP to TEDA North Zone, and investment in electrical, food, and pharmaceutical will be encouraged.

Just a minor shift in industry focuses…. that will be bad for chemical companies, but good for others.

Dagang: South of the port, Dagang has been open for several years, and they have been successful at attracting a wide variety of manufacturers (construction materials, paint, petrochemical derivatives, etc). The park is split into a north and south zone where the north zone is anchored by Sinopec, and the south Petro China.

Land availability is quite good, and as they have a few phases yet to complete expansion will not bean issue. Where Dagang is different than the other zones is that their surrounding area has expat quality housing and some good restaurants (The Wrong Door hotpot restaurant gets 2 thumbs up from me).

Lingang: Just south of the port, Lingang is the newest of the three parks, and has a LOT of land left. During our tour, you could see that much of the peripheral infrastructure is still under construction… but what they were building (220KVA power station, fire station, pipe racks, etc) were very impressive.

Unlike CIP, Lingang’s companies are large gas and petrochem facilities (LG and Airliquid investments were both near the billion dollar level and have come online in the last 6 months). For smaller projects (under 100 Million USD), I am not sure I would recommend investing in this park over Dagang, however for large LPG or petrochem projects, this is the place to invest. The staff was very knowledgeable of the various environmental standards, and were very blunt… it will take 3-4 months to pass EPA. no exceptions.

Wrap-up:

Tianjin has a lot of appeal for manufacturers, but investors will be wise to update their materials on Tianjin. The New Binhai planning will affect a number of incentives, park focuses, and other infrastructural items that should be considered. for chemical investments, CIP is really going to be difficult… but for food producers, there is now a new option.

Make sure the New Binhai planning is part of your reading list, and bring it on your trip..the traffic is horrendous in Tianjin…

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2 Responses to “Tianjin’s New BinHai Plan for Chemical Industry”

  1. China Law Blog says:

    June 17th, 2007 at 1:57 am

    China’s “Next” Top Ten Cities for IT Outsourcing…

    Alsbridge Consulting, a Dallas, Texas, based consulting company that describes itself as an award winning outsourcing, offshoring and shared services advisory firm, just came out with its list of China’s Next Top Ten Cities for IT Outsourcing (h/t to …

  2. rashied halawani says:

    July 2nd, 2007 at 4:20 am

    please send more informations about chemical industry and chemicals….best regards