The nation's economic hub was named on Friday as the first Asia-Pacific research and development (R&D) center for French specialty chemicals firm Rhodia.

Shanghai was chosen "because China will become an economic centre in the Asia-Pacific Rim," explained Li Ji, vice-president of Zone R&D Operation Director of Rhodia Asia Pacific Pte Ltd.

The centre, Rhodia's fifth in the world after France, the United States and Brazil, was established to support the firm's 19 laboratories in China, the first of which was set up in 1997. Other labs in the Asia-Pacific region are located in Singapore, Japan, South Korea, Australia and Thailand.

Li said the Shanghai R&D center will be the firm's only one in the Asia-Pacific region.

The center, which will be located in the Rhodia Shanghai Technology Park in the city's Xinzhuang Industrial Zone, will contribute 80 per cent of its efforts to supporting Rhodia's work in China, with the remaining 20 per cent of services going to South Korea, Japan, Indonesia, Thailand and Malaysia.

Li said the firm's Shanghai labs had developed three products for the European and US markets over the past three years, bucking the trend of heavy reliance on technology from Europe.

"We will double the scale and personnel of the center within three years in a bid to develop more new products," Li said.

According to Serge Villatte, general manager of Rhodia (China) Co Ltd, the center is part of the company's further expansion in China.

He said Rhodia is considering investing more in China. It has invested US$338 million in building 15 industrial sites in China over the past decade, including five wholly owned foreign-funded ventures.

China will be Rhodia's new development focus over the next few years.

"China is very important to Rhodia's future development strategy," said Jean-Pierre Clamadieu, chief executive officer of Rhodia, on his visit to the country in January.

Clamadieu said the company's human resources in China will be one of the keys to its future success.

Rhodia's global net sales amounted to about US$8 billion last year, with China taking up 5 per cent. Villatte said this percentage will be doubled within three years.

Rhodia has worked out an expansion plan involving the purchasing of Chinese firms in order to achieve this objective.

According to Rong Zhonghua, Deputy General manager of Rhodia (China) Co Ltd, the company has purchased a State-owned pharmaceutical factory in Wuxi, Jiangsu Province at a cost of US$3 million, which is being upgraded by adding an investment of US$15 million.

Rhodia will close its US company and transfer its business to Wuxi when the plant goes online in August, Rong said.

(China Daily April 10, 2004)