March 9th, 2010
Huntsman to set up two JV's in China
Huntsman to set up two JV's in China: Reuters 09.03.10
After coming through a tough recession, many chemical companies are increasingly turning to emerging markets, especially China, where the economy is rebounding. Peter Huntsman said he expected the company's sales volume to grow 8 to 9 percent this year in China, its largest market in Asia, similar to the pace in 2009, helped in part by Beijing's economic stimulus plans and rising consumer confidence. The company, which already operates five manufacturing facilities in China, of which four are wholly owned, is seeking to expand its foothold in the country, Huntsman told Reuters in an interview. "We are negotiating two additional joint ventures. We are still in the process of negotiating value and prices," Huntsman said, adding that he hoped to strike deals in the next two to three months.
China generates about half of the company's sales in Asia, which makes up 23 percent of its global sales, compared with about 30 percent in the United States and 32 percent in Europe, he said. Huntsman, which makes the building blocks for consumer items from paint to swimwear to insulation, posted higher-than-expected fourth quarter global earnings and revenues, aided by accounting and tax benefits.
YUAN POLICY
China has come under pressure from the United States and other trading partners to let its currency appreciate, amid criticism that the yuan is vastly under valued and gives Chinese exporters an unfair trade advantage. Huntsman, whose brother is U.S. ambassador to China Jon Huntsman Jr, said he agreed that China's currency, the renminbi (RMB), was a bit strong but some U.S. manufacturers should also share the blame for their trade woes.
"I think too many manufacturers are saying that because it's successful in America, it's going to be successful in Europe, it's going to be successful in Japan or in China. And if they don't buy my product then there is a policy issue," he said. "I don't believe there is a policy issue. Sometimes you just make products that don't appeal to people," he added. "RMB is an issue, but is not a determining issue of trade."
(Editing by Edmund Klamann)