SHANGHAI: German chemical giant Henkel Group will invest at least 100 million yuan (US$12.1 million) in a global research and development (R D) centre in Pudong, Shanghai.

And Sandy Song, a spokesperson for Henkel in China, told China Daily yesterday that the cost of the project could go far beyond the initial budget.

Located in Pudong's Zhangjiang Biological Medicine Park, the centre will focus on the research and development of Henkel's core products, including adhesives, sealants and surface treatment materials.

Construction of the centre is scheduled to begin with a ground breaking ceremony in August. The entire project is expected to be completed around May next year.

Song added that the company was considering setting up a Henkel Adhesives University within the centre to co-operate with Chinese experts in the industry and to train Chinese engineers and researchers.

But she said further details were not yet available.

At the beginning of this year, Henkel invested US$500,000 to develop new-generation adhesives and sealants based on silicone-modified materials in collaboration with five Chinese universities, including Tsinghua University and Shanghai Jiaotong University, two of China's most prestigious institutions.

Henkel Group now has nine R D centres worldwide, with its Asian R D centre located in Japan.

Adhesives, sealants and surface treatment products are widely used in many industries, particularly in car making and electronics.

Henkel Technologies established itself in China in 1990. To meet the demands of the country's automobile, steel, home appliance, architecture, aluminium, construction and mobile phone industries, Henkel set up a R D laboratory in Shanghai's suburban Nanhui District in 2003.

The same year, Henkel Technologies expanded its Asia-Pacific manufacturing hub in Yantai, Shandong Province, to 6,500 square metres, with 60 per cent of its products sold in other Asia-Pacific markets.

The almost-saturated markets in developed countries has led to chemical multinationals setting their sights on the large adhesive and sealant market in China.

According to China Adhesives Industrial Association, China's adhesive production stood at 3.79 million tons last year. Output is expected to hit 7.3 million tons and sales revenue will reach 5.7 million yuan (US$689,000) by 2010, if both have an annual growth rate of about 11 per cent. By 2010, China will be the world's top producer of adhesives and sealants in the world.

(China Daily 07/07/2005 page11)