China and India provide growth in worldwide chemical investments

The worldwide market for plant-level expenditure in the chemical industry, which totalled more than US$214 billion in 2003, will reach almost US$241 billion by the end of 2008, expanding at a cumulative annual growth rate (CAGR) exceeding 2%, according to a new study by the ARC Advisory Group.

ARC says that globalisation is a key trend that will help shape capital expenditures in the chemical industry over the forecast period. Avid consumer demand for low cost products is forcing many companies to look offshore to lower production costs.

Many chemical companies are expanding their presence in the developing regions of the world to take advantage of low-cost structures as well as growing demand for chemicals in these regions.

China, with its low cost labour and rapidly improving manufacturing capability, has been a major beneficiary of the move offshore. India is also benefiting from the globalisation of the chemical industry; even if the country's economic growth has performed below expectations.

The dynamism of China and India's economies are the making driving factor behind the growth occurring in chemical investments worldwide. China's production is skyrocketing, reflecting its strong economic growth and signalling its upcoming status as a major global force in the chemical industry.