China's largest polyvinyl chloride project, which started construction Wednesday, may help to ease the country's dependence on imported PVC, analysts said.

Three local chemical firms will inject nearly 3.7 billion yuan (US$445 million) to build the plant in Shanghai Chemical Industry Park in Caojing. Shanghai Tianyuan Group will hold 51 percent of the stake, while Shanghai Chlor-Alkali Chemical Co Ltd will take 44 percent and Shanghai Coking and Chemical Corp will take the remainder.

When it is fully constructed, the plant will boast an annual PVC production capacity of 300,000 tons.

The first phase of the project is expected to be completed by the end of 2005 and become operational in the first half of 2006.

PVC is widely used to make plastics, whose application can be found in the agriculture, construction and electronics sectors.

"Forty percent of China's PVC demand is satisfied with imports and this dependence has lured several chemical firms to tap the market," said Chi Yu, an analyst with Industrial Securities Co Ltd.

China consumed over 6.7 million tons of PVC in 2003. Growth in demand has hovered 15 percent for the last few years.

(East Daily March 3, 2004)