Added energy for trade links

Financial Times: Added energy for trade links

By Jonathan Moules

Published: May 12 2004

Anglo-Chinese business relationships received a fillip yesterday when four British companies signed joint ventures worth $1.5bn with companies in China.

Senior executives from the energy businesses BP and Shell, Kingfisher, the retail group, and its B&Q home improvement subsidiary joined Patricia Hewitt, UK trade secretary, and Bo Xilai, the Chinese commerce minister, at a contract signing ceremony in London.

BP accounted for the lion’s share of the contracts with more than $1bn of business. The largest was a $577m contract with PetroChina to develop hundreds of retail petrol stations in Guangdong province by 2007. A similar arrangement worth $250m in Zhejiang province was signed with Sinopec.

BP is also involved with Sinopec in a $120m joint venture to build an acetic acid plant in Nanjing, a city in eastern China, which will be capable of handling 500,000 tonnes of the chemical each year.

The move builds on the success of the two companies’ acetic acid plant in Chongqing, where capacity is being increased from 200,000 tonnes a year to 350,000 tonnes a year.

John Browne, BP chief executive, said: “China, as one of the most rapidly expanding economies, offers significant opportunities for the BP Group, particularly its customer-facing businesses.”

Shell is also teaming up with Sinopec in a $200m project to develop a network of about 500 petrol stations in Jiangsu province. Sinopec will hold a 60 per cent equity stake in this joint venture.

BP and Fu Hua Group signed a letter of intent to examine the viability of expanding production at the BP Zhu Hai purified teraphthalic acid project from 350,000 tonnes a year to 1.2m tonnes a year.

The plant, which is located at Zhu Hai in the Pearl River

Delta, is a joint venture in which BP owns 85 per cent. The expansion plan would be worth $366m.

Kingfisher, B&Q and Midea Group signed a deal on “a strategic purchase framework” valued at $75m.

BP, Shell and B&Q (China) are among the biggest UK companies operating in China, although there are about 3,000 British joint ventures in the country.

UK Trade and Investment, an arm of the UK’s Department of Trade and Industry, provided support to develop British business in China.

“When I was in China in January, I was struck by the dynamism of the place and the eagerness to do business with the UK – something I think British firms can capitalise on,” Ms Hewitt said.

Separately, BP announced that it would be a partner in a hydrogen vehicle demonstration project led by the Chinese Ministry of Science and Technology.

BP will design, construct, operate and supply hydrogen refuelling facilities for the project, which aims to have vehicles operating in Beijing and Shanghai.

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